Thursday, July 6, 2017
By Justin Wier
Former Campbell Mayor George Krinos was sentenced to 57 months in prison and ordered to pay $1.2 million in restitution to those he defrauded.
Judge Dan Aaron Polster in federal court in Cleveland issued the punishment Wednesday afternoon.
Krinos, 39, of Boardman, served as mayor of Campbell from December 2009 to January 2011, when he resigned.
In January, Krinos pleaded guilty to a count of securities fraud and a count of willful failure to collect or pay tax after defrauding more than 10 investors out of nearly $1.2 million between 2011 and 2014.
Krinos received 57 months for each count, but the sentences run concurrently. He must turn himself over to the U.S. Marshals Service on Sept. 15.
The sentence also includes three years of supervised release and a $200 special assessment.
Jeffrey Lazarus, the federal public defender who represented Krinos, said the sentence was agreed to in the plea deal.
“We’re pleased with the sentence,” he said. “This is what we expected.”
He added that Krinos hopes any co-conspirators who were involved in the case also would be brought to justice.
Lew Jackson, Campbell’s city administrator who filled the same role during Krinos’ term, said he felt like he served a year and a half by himself.
“He was a young 33-year-old gentleman who was very smart,” Jackson said. “He just didn’t really make good decisions.”
Krinos is now in Campbell’s past, and Jackson said Krinos’ actions after leaving office don’t reflect negatively on the city. Jackson said he feels bad for Krinos and his family.
“He’s got a nice family,” Jackson said. “I just feel bad for them.”
A case investigated by the FBI and the IRS determined Krinos, through Krinos Holdings, sold securities through false and deceptive practices to numerous victims in northern Ohio.
He sold unregistered securities under the pretense that the funds would be used for legitimate business purposes. Instead, he used the money for personal expenses and to engage in unauthorized foreign-currency transactions, according to an information filed by the U.S. attorney.
Krinos also falsely told investors he managed about $600 in an investment account when he had only $5 in the account, according to the document. He falsified letters and statements to reflect higher balances.
He used funds for personal use at restaurants, bars, casinos, adult-entertainment clubs and hotels, and characterized them as “sales and marketing” costs in a budget given to shareholders.
Krinos also withheld taxes, including federal income taxes and Federal Insurance Contribution Act taxes from his employees, without paying those taxes to the IRS.
Although these allegations weren’t raised until Jan. 3, the U.S. Securities and Exchange Commission issued a statement about Krinos more than two years ago. That commission filed a document in October 2014 saying Krinos deceived investors and made unregistered stock sales through Krinos Holdings.
Krinos Holdings was founded in 2012 to provide money to startup companies but never gave them any, and Krinos never told investors their money was being used for his personal expenses, the SEC report said.
Krinos also is the subject of a lawsuit Ohio Attorney General Mike DeWine filed in Mahoning County Common Pleas Court in May accusing Krinos of defrauding customers through a home-improvement business.
The lawsuit alleges Krinos used a false name while running an improperly registered business called Windows, Doors, Kitchens and More Construction Co., which accepted money from customers for shoddy or uncompleted work.
The lawsuit seeks more than $25,000 in civil damages from Krinos and an injunction against Krinos to stop future violations.