A federal judge in Philadelphia Wednesday afternoon sentenced Carmel businessman Dan Laikin to 45 months in prison for orchestrating an ultimately unsuccessful scheme to pump up the stock price of National Lampoon Inc., the Los Angeles-based company he led.
    
The sentence was short of the 60-month maximum he could have received under a plea agreement worked out with federal prosecutors last fall. Under that deal, Laikin pleaded guilty to one felony count of conspiracy to commit securities fraud, while prosecutors dropped a securities fraud count.

Laikin, 48, former co-owner of locally based Biltmore Homes, stepped down as CEO of National Lampoon in December 2008 after FBI agents, guns drawn, arrested him at his Southern California home.

Prosecutors say Laikin conspired with a Las Vegas-based consultant and two East Coast stock promoters to try to artificially inflate Lampoon’s stock price from under $2 a share to $5 a share. Because Laikin owned about one million shares of company stock, he would have profited handsomely from the surge. The other three defendants in the scheme also admitted guilt. Two have been sentenced, with one receiving 30 months in prison and the other 18.

Court records say the FBI nabbed the four as part of a sting that included a stock promoter who was secretly working for the government. The records quote from conversations investigators say Laikin and other defendants had with the confidential witness.

Investigators say Laikin’s scheme began in March 2008, when he paid a co-defendant to orchestrate a pattern of trading in National Lampoon that would create the false impression of increased market activity and demand for the shares.

At a meeting in April, Laikin told the confidential witness that he needed two things: “revenue for my business” and “a stock that actually trades at a value I am happy with.”

None of the efforts succeeded in kindling interest in the stock, which most recently traded for a mere 17 cents a share.

The probation department determined that federal sentencing guidelines could have justified 70 months to 87 months in prison—longer than the maximum allowed under the single count Laikin pleaded guilty to. The department boosted Laikin’s offense level for sentencing-guideline purposes because he was an “organizer or leader” of the fraud scheme and because he led Lampoon at the time.

But attorneys for Laikin had argued for leniency. They filed more than 100 letters from friends, family and community and business leaders who said that Laikin’s misconduct was an aberration. The letters cast Laikin as an outstanding family man who had done many good deeds for others.

In court papers, Laikin’s attorneys also argued “there was no loss, there was no gain, and there were no victims. The scheme was not only unsuccessful; it was ‘light years’ from coming to fruition.”

But federal prosecutors scoffed at characterizing Laikin as a devoted family man of high moral character who committed his crime merely to save a business.

According to a filing by prosecutors, “For over two years, [Laikin] lived a double life by openly taking his mistress around Hollywood, only to have her move out of the home they shared when his wife and family would visit.”

Prosecutors added that while Laikin “very well may have a generous, benevolent side, he clearly also has a greedy, manipulative, and criminal side that he kept from many.”

They noted, for instance, that Laikin disclosed nothing to the government about his involvement with Akron, Ohio-based Fair Finance Co. before the company’s bankruptcy trustee sued him in April seeking to collect on more than $19 million in unpaid loans.

The suit charged that Laikin, a Fair director and friend of company CEO Tim Durham, “used his insider status to obtain loans ... on commercially unreasonable terms and without formalities.”