O.C. Man Fined $7 Million in Fraud

A U.S. District Court judge has fined an Orange County resident and his business partner more than $14 million for violating several anti-fraud provisions of securities laws.

Westminster resident Eugene M. Carriere and Ronald T. Mulhall of El Segundo were ordered Monday by Judge Christina A. Snyder to each pay about $7 million for selling unregistered securities of their three affiliated entertainment corporations.

The Securities and Exchange Commission filed a complaint a year ago against Yes Entertainment LLC, Yes Entertainment Network LLC and Los Angeles based-Yes Entertainment Network Inc. after investors were told that sales commissions were 12% when they were 45%.

The court ordered each partner to pay prejudgment interest on the fines in the amount of $752,543 and $110,000 in civil fines for his role in acquiring more than $14 million in “ill-gotten gains.” Altogether, the penalties add up to $14,656,808.

The commission also charged that Mulhall, president and chief executive officer of Yes Entertainment Network, said he was a “highly successful lawyer” when he was in fact disbarred for misappropriating client funds and that the two men told investors that 85% of proceeds would be used for business operations, when almost $6 million was wired offshore and some funds were diverted to their personal use.

The Las Vegas-based Yes Entertainment LLC operates “channels” of family-oriented Internet programming.