Former CEO From Mundelein Faces Federal Fraud Charges

CHICAGO, IL —A former CEO of an engine manufacturer faces federal fraud charges for allegedly deceiving investors about the company’s financial performance. Gary S. Winemaster, of Mundelein, has been charged with securities fraud, failing to certify financial report, ten counts of wire fraud and two counts of making false statements to an auditor for allegedly co-conspiring with the Wood Dale-based manufacturing company's vice president of sales, Craig M. Davis, of Batavia, and general manager James F. Needham, of Leavenworth, Kansas.

Between 2014 and 2016, the trio is accused of fraudulently inflating revenue numbers by millions of dollars, which were reported to investors and shareholders for the publicly traded company, according to a news release from the Federal Bureau of Investigation.

Winemaster, 61, was the company's chief executive officer and largest shareholder, according to authorities. The trio allegedly concealed information about special terms of sales to customers, and Winemaster and Davis are accused of authorizing shipments of products to customers who had not agreed to accept delivery, according to an indictment filed last week in U.S. District Court in Chicago.

According to the indictment, the defendants schemed to defraud shareholders and other investors in connection with the company’s common stock, which was listed on the Nasdaq Stock Market. In doing so, they deceived shareholders and other investors about the company’s financial health and performance, the indictment states.

David and Needham are charged with securities fraud and ten counts of wire fraud for their alleged role in the scheme.

The maximum sentence for securities fraud is 25 years in prison, while wire fraud and making false statements to an auditor are each punishable by up to 20 years. Failing to certify financial reports is punishable by up to ten years and a fine of up to $1 million, according to federal authorities.