Ex-KIT Executive Denies Scheme to Blame Fraud on His Boss

Updated on
  • Tuzman is on trial accused of defrauding KIT investors
  • Two government witnesses were close friends for years

A former KIT Digital Inc. executive who pleaded guilty to fraud at the digital-video software firm denied a lawyer’s claim that he coached a close friend and former colleague for years to falsely blame their ex-boss for their crimes.

Robin Smyth, KIT’s former chief financial officer, and Gavin Campion, who was a president of the company, are government witnesses in the fraud trial of ex-KIT Chief Executive Officer Kaleil Isaza Tuzman, who is accused defrauding investors out of millions of dollars as the startup foundered in 2010.

Smyth testified this month at a criminal trial in Manhattan that Tuzman directed the use of fake license agreements that allowed millions of dollars in cash payments to some of the company’s customers to appear as income on financial records. As part of his defense, Tuzman claims he wasn’t aware of what Smyth and Campion were up to, and that the men conspired to testify against him to avoid stiff prison terms.

Under cross-examination on Tuesday by Tuzman’s lawyer, Marcellus Antonio McRae, Smyth agreed that several emails about the bogus licenses, which were presented by prosecutors as evidence, don’t include specific admissions by the former CEO that he was aware of the fraud being discussed. McRae also pointed to evidence that from 2012, when Smyth was fired by KIT, to Smyth’s arrest in 2015, Smyth had met Campion repeatedly in London and their native Australia. McRae suggested the men communicated through emails, Blackberry messages, text messages and Skype calls to get their stories straight.

Smyth repeatedly denied that he planned fake testimony.

"Isn’t it true that you and Mr. Campion were actually coaching one another in terms of how you would blame Kaleil for your frauds?" McRae asked Smyth.

"That is not true," Smyth said.

"Sir, you begged Mr. Campion to testify to support what you’re saying against Kaleil," McRae said.

"Absolutely not true," he replied.

Rehearsed Testimony?

Smyth and Campion went on to work at another company together after they left KIT. McRae suggested that relationship allowed the men to continue to plan their defense before their arrests.

"Isn’t it true that you also wanted to stay in contact with Mr. Campion and work next to him so that the two of you could continue to rehearse your false testimony against Kaleil?" McRae asked.

"Not true," Smyth replied.

Tuzman and his former business associate, technology entrepreneur Omar Amanat, are on trial accused of manipulating KIT’s shares with help from a North Carolina hedge fund, Maiden Capital LLC. The hedge fund’s founder, Stephen Maiden, pleaded guilty and testified against the men as the government’s star witness.

Campion has also pleaded guilty and is expected to testify for prosecutors. His lawyer, Jim Walden, said that his client “would not blame an innocent person. His testimony will speak for itself.”

The case is U.S. v. Amanat, 15-cr-536, U.S. District Court, Southern District of New York (Manhattan).

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