Laurie Bebo, former CEO of Assisted Living Concepts Inc., has been ordered to pay $4.2 million in civil penalties for violating the Securities and Exchange Act by administrative law judge Cameron Elliot. The initial decision concludes a long-fought battle against Bebo after the Securities and Exchange Commission filed suit against her last year.
The decision also prohibits Bebo from acting as an officer or director of any securities issuer.
The SEC alleged that, while serving as CEO, Bebo and former CFO of Assisted Living Concepts (now Envilant) John Buono conducted a scheme to meet lease requirements by falsifying documents with fake occupants.
Elliot stated in his decision that he did not believe Bebo’s testimony from earlier this year, in part because she recounted so many details he believed would be implausible to remember six years later and noted that she “was generally not a credible witness.”
“…She had the breathtaking audacity to tell, under oath, what largely amounted to a fairy tale,” Elliot wrote. “The simple truth is that Bebo concocted an elaborate fiction, started telling it over six years ago, and has never stopped.”
A month after the SEC brought charges against her, Bebo filed her own suit against the SEC alleging the regulator violated her right to a jury trial, but lost an appeal in August on her Constitutional argument. Bebo also filed suit against Assisted Living Concepts for failing to pay $900,000 for her attorney fees and other expenses she incurred as a result of the federal civil case against her.
Buono settled with the SEC in the case against him for $100,000 in January. That settlement also bars Buono from serving as an officer or director of a public company.
The decision follows a long line of lawsuits over the past few years related to the alleged incidents. Bebo was fired in May 2012 for her role in the lease violations, following a lawsuit by Ventas Inc. (NYSE: VTR) against Assisted Living Concepts in April 2012.
Written by Amy Baxter