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Ex-Kit Digital president pleads guilty to fraud

NEW YORK, Nov 17 (Reuters) - A former president of now-bankrupt Kit Digital Inc has pleaded guilty to fraud, and is cooperating with a U.S. probe into what prosecutors have called a scheme to deceive investors about the video technology company’s health, court papers show.

Gavin Campion, an Australian and UK national who lives in Australia, admitted to securities fraud and conspiracy charges, according to papers made public on Thursday in the U.S. District Court in Manhattan.

Campion, 44, faces a Jan. 30 sentencing, court papers show. The U.S. Securities and Exchange Commission on Thursday filed related civil charges against him.

Jim Walden, a lawyer for Campion, was not immediately available for comment.

Authorities said Campion conspired from 2010 to 2012 with other Kit Digital officials, including Chief Executive Kaleil Isaza Tuzman and Chief Financial Officer Robin Smyth, to book revenue from at least one dozen sham license agreements.

They said this inflated Kit Digital’s results, causing the New York-based company to understate losses by millions of dollars.

In a court filing, prosecutors said Campion reported having been approached and harassed several times, and punched once, by unknown people since returning to Australia in the wake of his June 30 guilty plea, and that his house had been broken into.

Campion said he believed these incidents reflected an effort by Tuzman to discourage his cooperation, and that Tuzman had “verbally threatened” him several times while the alleged fraud scheme was taking place, prosecutors said.

Reed Brodsky, a lawyer for Tuzman, was not immediately available for comment.

Kit Digital filed for bankruptcy protection in April 2013.

Tuzman, a former Goldman Sachs analyst, pleaded not guilty in July to criminal charges related to Kit Digital, after his extradition to Manhattan from Colombia.

He was subjected to home confinement and has been living in a New York apartment, court papers show.

Smyth pleaded guilty in March to securities fraud, and agreed to cooperate with prosecutors.

The case is U.S. v. Tuzman et al, U.S. District Court, Southern District of New York, No. 15-cr-00536. (Reporting by Jonathan Stempel in New York; Editing by Richard Chang)