Prosecutors: Ex-CEO of Latex 'Pillaged' Company
The former chief executive of Latex International "pillaged" the Shelton mattress manufacturer to pay for an extravagant lifestyle that included hundreds of thousands of dollars in jewelry for himself, his wife and his mistress in London, federal prosecutors said Monday.
Authorities say Kevin Coleman should be sent to prison for substantially more than four years when he is sentenced Tuesday in U.S. District Court in Bridgeport. Coleman, of Waseca, Minn., pleaded guilty to wire fraud and tax evasion related to the embezzlement of about $1.7 million from the company.
"He reached a level of importance, prestige and income that very few people reach," Prosecutors wrote in court papers. "But instead of fulfilling responsibilities and obligations to the company's owners and employees, he pillaged Latex to fund an absurdly extravagant lifestyle."
Coleman, 51, used the company's money to buy an emerald cut diamond for a ring for himself valued at about $57,000, and bought a Mercedes convertible for his mistress, prosecutors said.
He fraudulently purchased hundreds of thousands of dollars in merchandise from Louis Vuitton, Nordstrom and other merchants and spent tens of thousands of dollars in travel to St. Martin and Europe, authorities said.
Authorities say the crime stemmed from greed, noting that Coleman was making between $359,000 and $460,000 at the time.
"That was not enough for Coleman," prosecutors wrote. "And in fact, it is hard to purchase hundreds of thousands in jewelry and to support a mistress in London with that salary."
Joanne Osmolik, who was vice president for human resources at Latex, was sentenced in April to four years in prison for embezzling about $1.7 million from the company.
Latex laid off 43 employees, closed a plant in England and suspended the 401K plan for employees in an effort to survive the financial impact of the fraud by the pair, prosecutors said.
Coleman's attorney is seeking a sentence of no more than four years, saying Coleman promptly accepted responsibility for what he called self-indulgent and reckless behavior fueled by rampant alcohol and drug abuse. Coleman's stepfather was an alcoholic who routinely beat Coleman, his attorney said.
"While his difficult upbringing and his addictions do not fully explain his conduct, they do shed some light on the impulsive and irresponsible actions that gave rise to the charges in this case," wrote his attorney, Robert M. Frost Jr.
Coleman has undergone treatment and has been sober for six months, Frost said.
"He stands before this court deeply remorseful and he has a better understanding what caused him to engage in such reckless conduct," Frost wrote.
Coleman disagreed with the company's claimed effects of the embezzlement.
"At the end of the day, when all is said and done, Mr. Coleman will have lost two jobs, his corporate investment in Latex, his reputation, his friends, his wife of 30 years and he will be obligated to make restitution payments for the rest of his life," Frost wrote.
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