A Philadelphia executive who pleaded guilty to participating in a $40 million television infomercial fraud was sentenced yesterday to one year and one day in prison.
Patrick Buttery, 55, was the chief financial officer of Computer Personalities Systems Inc., which operated as the Video Computer Store and Direct 2 U Inc.
On a national scale, the company charged consumers nearly $4 million for computers and parts that were never delivered - putting customers who complained on hold for hours, prosecutors said.
The company also bilked vendors of $13 million in sales and defrauded financial institutions of approximately $22 million. MBNA alone lost $10 million, prosecutors said.
Victims were defrauded between 1999 and 2001, as the business spiraled out of control. An FBI and IRS investigation soon followed, culminating in indictments in 2003.
Buttery's cooperation with authorities helped lead to a guilty plea from George Cappell, the primary defendant. Cappell, the company CEO and star of its television commercials, was sentenced last year to seven years in prison.
"Your cooperation should be substantially rewarded," U.S. District Judge Anita B. Brody told Buttery yesterday.
"You understand that this wasn't just a bad business deal," she said. "You understand this was fraud. In some sense, you were a victim."
Prosecutors Peter Hardy and Judy Goldstein Smith had sought a term of "several years."
Nonetheless, Hardy said afterward: "We believe this is a good sentence and still sends a message to people in Mr. Buttery's position who have gone to business school and have executive positions: When your business starts to go bad on you, what you don't do is turn to crime."
Defense attorneys Benjamin Brait Cooper and Catherine C. Henry told Brody that Buttery was contrite and had worked hard to make up for his mistakes.
"The judge said he was doing a yeoman's job of taking care of his family," Henry said. "It's not just words: Here's a guy who's gone from being a COO to living in his mother-in-law's house, getting up at 2 a.m. each day to deliver the paper, takes care of the kids during the day while his wife works, and then bartends at night. He's changed his life and standard of living and that's what the judge wanted to reward."
Leon A. LaRosa Jr., a forensic accountant who worked with the bankruptcy trustee in the case, shook his head as Brody pronounced sentence.
"A disgrace," he muttered aloud in the last row of the gallery, clearly upset. Afterward, he told reporters: "This shows that crime pays."