Jury selection was expected to begin late this morning in the civil trial of Timothy Harcharik, a former Brightpoint Inc. worker accused of helping orchestrate an $11.9 million accounting fraud in the late 1990s.
Harcharik, 53, served as Brightpoint’s director of risk management from 1997 to 2002.
The Securities and Exchange Commission says that in late 1998 and early 1999 he worked with then-Chief Accounting Officer John Delaney to purchase a sham insurance policy from New York-based American International Group. According to investigators, the policy allowed Brightpoint to spread out over three years losses that should have been reported in 1998.
In court filings, the SEC says that both Delaney and an AIG official who sold the policy will testify against Harcharik.
“Two compelling witnesses … will testify at trial that Harcharik knew the true nature and purpose of the AIG policy all along, and their testimony will be supported by contemporaneous e-mails, documents and handwritten notes,” the SEC wrote in a brief. “Harcharik, however, seems oblivious to the substantial evidence implicating him in the fraud.”
But Harcharik, who is defending himself without an attorney, says he did nothing wrong. He notes that he wasn’t an employee of Brightpoint, only an independent contractor. In addition to having no accounting expertise, Harcharik said he had no authority over the company’s accounting or even knowledge of how it recorded transactions.
The case is being tried in federal court in Manhattan, N.Y. The court has set aside three weeks for the case, though it may wrap up far quicker.
Delaney settled with the SEC in 2003, agreeing to a $100,000 fine. In a separate criminal case last year, he pleaded guilty to securities fraud and was sentenced to eight months of house arrest. A federal grand jury indicted Harcharik on obstruction of justice in 2005. A judge later dismissed the charge.
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