Nevada Senate urged to approve bill to stop corporate fraud

CARSON CITY, Nev. (AP) -- A state Senate panel was urged Tuesday to endorse an Assembly-approved measure that would impose big fines and long prison terms on people convicted of corporate crimes in Nevada.

Under Assemblyman David Goldwater's AB163, someone who destroys paper or electronic documents to hide illegal activities or hinder an investigation into such activities could face fines up to $500,000 and prison terms of up to 20 years.

The problem, Goldwater told the Judiciary Committee, is "just nothing more than pure greed, people's greed and avarice and 'enough is not enough.' It's very troubling and we need to respond to it in any way we can."

The bill covers financial institutions and securities traders, and makes it a felony to knowingly file incorrect financial statements. It also bars casinos from using the same accountant to perform internal and external audits.

Goldwater, D-Las Vegas, said the proposal would help protect investors who otherwise might lose all their savings to white-collar criminals.

Other backers of the bill included Secretary of State Dean Heller, who said it parallels the federal Sarbanes-Oxley Act, the new corporate accountability law prompted by unscrupulous accounting at Enron, WorldCom and other public companies.

Heller termed AB163 "a great move in the right direction." He added that it should help in his office's efforts to conduct investigations "that are getting more and more complicated."

The proponents also said that while fines help to slow corporate crime, people considering such crimes would think twice if the penalty is prison time.

Besides Goldwater's bill, lawmakers are considering SB124, by Sen. Dina Titus, D-Las Vegas, which protects Nevadans against Enron-type corporate schemes. Approved by the Senate, it's up for a May 5 hearing in Assembly Judiciary.

That bill ensures that corporate officers or stockholders remain personally liable if there's "intentional misconduct, fraud or a knowing violation of laws." Illegal distributions of corporate assets also are included.