Aug. 8 (Bloomberg) -- Ex-Deloitte & Touche LLP partner Thomas P. Flanagan pleaded guilty to one count of securities fraud and admitted he traded on inside information about clients of the firm, the U.S. Justice Department said.
Flanagan, 64, entered his plea today before U.S. District Judge Robert Dow in Chicago, acting U.S. Attorney Gary Shapiro said in a press statement. The accountant engaged in the conduct from December 2006 to May 2008, the government said.
He left the firm in the latter year, ending a 30-year association with Deloitte and its corporate predecessors. Flanagan made about $420,000 in illicit profits for himself and $58,000 more for a relative, according to prosecutors.
“The profits resulted from illegally trading on the inside information that Flanagan obtained regarding Deloitte clients Best Buy Co. Inc., Walgreen Co., Motorola, Inc. and Sears Holding Corp.,” Shapiro said.
Flanagan is free on his own recognizance. He is to be sentenced on Oct. 25.
Securities fraud is punishable by as long as 20 years in prison. A plea agreement with prosecutors calls for a term of three to four years.
A defense lawyer, Joel Levin in the Chicago office of Perkins Coie LLP, didn’t immediately reply to a voice-mail message seeking comment.
Jonathan Gandal, a Deloitte spokesman, said the firm sued Flanagan for his actions after learning of them.
“Deloitte unequivocally condemns the actions of this individual,” Gandal said by e-mail. “As the DOJ complaint specifically alleges, Mr. Flanagan concealed from Deloitte his trades in the securities of our clients, lied about his compliance with our independence policies and otherwise circumvented our system for reporting and tracking investments.”
Flanagan and his son Patrick agreed to pay more than $1.1 million to settle related U.S. Securities and Exchange Commission insider-trading claims in 2010.
The case is U.S. v. Flanagan, 1:12-cr-00510, U.S. District Court, Northern District of Illinois (Chicago).
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