Edward R. Cheramy, a central figure in the government's fraud case against fallen long-distance giant IDB Communications Group Inc., pleaded guilty Friday to charges that he lied to investors in 1994 amid allegations that the company inflated earnings.
The plea brings to a close the criminal side to one of the government's first prosecutions of a publicly traded company accused of "managing" its earnings to meet Wall Street expectations.
By admitting to one count of securities fraud, Cheramy, 55, faces up to 10 months in prison and a $250,000 fine at a sentencing hearing Sept. 27, said Assistant U.S. Atty. Jon Cederberg.
A federal grand jury indicted Cheramy and his then-partner, Jeffrey P. Sudikoff, in December 1997 on 19 counts of securities fraud and insider trading. Sudikoff, former owner of the Los Angeles Kings hockey team, pleaded guilty earlier this year to two counts of insider trading, agreeing to pay a $3-million fine. He faces 12 to 18 months in jail at a sentencing hearing scheduled for August.