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Alpharetta Man Convicted of Accounting Fraud at Beazer Homes

A federal grand jury in Charlotte convicted Michael T. Rand on seven fraud charges, destroying 10,000 emails and obstruction of justice.

Michael T. Rand, 48, of Alpharetta, and former chief accounting officer for Beazer Homes USA, has been convicted by a federal jury of seven crimes relating to a seven-year accounting fraud conspiracy at Beazer, as well as document destruction and obstruction of justice.

According to a news release from U.S. Attorney David A. Brown of the Western District of north Carolina, the charges arise from an investigation involving Beazer and its employees that began in March 2007.

In July 2009, Beazer was charged with, among other things, participation in the conspiracy and securities fraud with Rand. Beazer accepted responsibility for those charges and, in a deferred prosecution agreement, agreed to pay restitution of $50 million. Rand was indicted in August 2010.

Brown and Chris Briese, Special Agent in Charge of the FBI-Charlotte Division, announced the conviction on Oct. 28 via press release, 17 days after Rand’s federal jury trial began.

“Michael Rand selfishly profited while so many others were suffering in the struggling housing industry," Brown said.

Rand was convicted of directing an accounting fraud conspiracy to falsify reported profits at Beazer by lying to Beazer’s auditors, fraudulently achieving earnings targets, falsifying Beazer’s books and records, and deceiving the public by boosting and lowering earnings at Beazer. Between 2005 and 2006, Rand entered into a hidden oral side agreement with another company through one of its employees, which was designed to allow Beazer to obtain cash and to improperly report revenue from purported “sales” of model homes. Evidence showed that between 2000 and 2007, Rand directed a scheme to commit securities fraud and create false books and records at Beazer by practicing “cookie jar accounting,” which allowed Rand and others to falsely report profits in Beazer’s publicly reported financial statements.

After being notified of the federal grand jury’s investigation of Beazer in March 2007, trial evidence showed Rand deleted nearly 10,000 emails, including emails containing evidence of his accounting fraud as well as the mortgage fraud occurring at Beazer Mortgage Corporation, an entity shut down by Beazer as a result of this investigation. He also was convicted of lying to hinder the FBI investigation when he made false statements to Beazer's audit committee when he knew those statements would be reported to the FBI and the U.S. Attorney.

A sentencing date for Rand, who is released on bond, has not been set yet. Rand faces maximum statutory penalties totaling 125 years in prison based on the charges of conviction.

 

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