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Colorado CPA Draws SEC Suspension

SECThe SEC has temporarily suspended an Aurora, Colo.-based accountant whose actions as an auditor resulted in a federal court enjoining him from violating securities laws. The SEC took the action against Lawrence O'Donnell, whose operated the firm Larry O'Donnell CPA. O'Donnell drew court action for his alleged actions in signing off on the financial statements of Imperiali from 2006 through 2009 that assigned millions of dollars in values to what were said to be worthless assets.

O'Donnell has 30 days to petition for the temporary SEC suspension to be lifted. A hearing will be set if a petition is received. The suspensions will be made permanent if none is forthcoming. The U.S. District Court for the Southern District of Florida permanently enjoined O'Donnell on Nov. 8, 2013.

O'Donnell's membership in the American Institute of CPAs was terminated on Dec. 30, 2010, when he was found guilty of violating AICPA Bylaw 7.4.6 by failing to cooperate with the Ethics Charging Authority in an investigation of his professional conduct. His CPA license was revoked by the Colorado Board of Accountancy on June 1, 2010. The Public Company Accounting Oversight Board revoked O'Donnell's registration in October 2010 and slapped him with a $75,000 civil monetary penalty.

A web search shows a firm in Aurora, Colo., Larry O'Connell CPA, operating a web site that promotes a wide variety of tax and accounting services - including audit services - and has a telephone number and a contact form that indicate potential clients can contact the firm to inquire about services.

The initial SEC action said Imperiali sold $2.4 million in stock to investors from December 2005 through at least June 2007. But while the company claimed to be a diverse, thriving multinational corporation, it was in fact a shell company with purported subsidiaries worthless or nonexistence, the SEC said. Private-placement memoranda said the organization run by Daniel Imperato claimed a portfolio of companies with $250 million in revenue in 2008 and $500 in 2009. "In reality, Imperiali's portfolio companies had no operations, no products or services," the SEC charged on Jan. 9, 2012.

The SEC said Imperiali changed O'Donnell's audit reports on financial statements from 2007 and the audtor informed the company's' board by letter on Sept. 18, 2007 that he had discovered possible illegal actions, including use of his audit report in connection with financial statements he did not audit. However, the CPA then audited Imperali's financial statements in 2010 and said they complied with GAAP.

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