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Ex-UPS exec's son pleads guilty to fraud scheme over Maxim magazine
November 5, 2014 / 5:01 PM / 3 years ago

Ex-UPS exec's son pleads guilty to fraud scheme over Maxim magazine

NEW YORK, Nov 5 (Reuters) - The son of a former United Parcel Service Inc vice president pleaded guilty to a scheme in which he impersonated his father to fraudulently obtain millions of dollars intended to finance the purchase of Maxim magazine.

Calvin Darden Jr., 40, pleaded guilty to two counts of wire fraud on Tuesday before U.S. District Judge Jed Rakoff in New York, less than two weeks before his criminal trial was scheduled to begin.

Prosecutors had accused Darden of an elaborate scheme using fake emails and bank statements to secure more than $8 million to buy the men’s magazine. He was also accused of a separate fraud in which he tricked a Taiwanese company into paying him $500,000 after falsely claiming he would arrange a New York Knicks exhibition basketball game in Taiwan.

Darden’s father, also named Calvin, is the former vice president of U.S. operations for package delivery company UPS.

The younger Darden is scheduled to be sentenced in April.

In September 2013, then-Maxim owner Alpha Media Group Inc - partly owned by private equity firm Cerberus Capital Management LP - announced it had agreed to sell the magazine to Darden Media Group, headed by the elder Calvin Darden. The $31 million deal did not go through.

Prosecutors said the younger Darden last year provided a fake bank account statement to an unidentified lender that listed stock holdings by his father in at least three companies for which the senior Darden served as a director.

Darden’s father is on the corporate boards of Coca-Cola Enterprises Inc, Target Corp and Cardinal Health Inc.

Once the lender placed $5.5 million in escrow, Darden sent a fake email to the law firm holding the money that authorized the release of the funds, according to a criminal complaint. The firm released $4.9 million of the money, which was purportedly to help finance the Maxim deal, to him.

He secured an additional $3 million from a second lender using another bogus account statement, prosecutors said. The younger Darden also unsuccessfully attempted to raise $20 million from a third lender, according to prosecutors.

A former stock broker, he previously pleaded guilty in 2005 to New York state charges that he stole almost $6 million from 11 people and served several years in prison.

Attorneys for both Dardens did not respond to requests for comment.

Alpha Media eventually sold Maxim in February to Biglari Holdings Inc. The terms of the deal were not disclosed. (Reporting by Joseph Ax)

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