Smart Online Inc.’s former Chief Executive Officer Dennis Michael Nouri was sentenced to eight years in prison for fraud and bribery in a stock-manipulation scheme, prosecutors said.
Nouri and his brother, Reza Eric Nouri, were convicted in July of bribing brokers to sell stock in the software developer to investors as shares were about to start trading in 2006. Reza Nouri, who was also sentenced yesterday in Manhattan federal court, got 18 months in prison, prosecutors said.
“The Nouris bribed brokers and committed other illegal acts to sell Smart Online stock to customers so that the price of the stock went up,” Manhattan U.S. Attorney Preet Bharara said in a statement today.
According to the statement, U.S. District Judge Denny Chin in New York at the sentencing called the crime a “brazen fraud” that targeted investors and the company itself.
Dennis Nouri’s lawyer, Joseph Rindone, didn’t immediately return calls for comment. James Mitchell, the lawyer for Reza Eric Nouri, declined to comment.
Smart Online, based in Durham, North Carolina, is a developer of Internet-delivered software applications.
The case is U.S. v. Nouri, 07-01029, U.S. District Court, Southern District of New York (Manhattan).