July 12, 2024

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Former MA sentenced to four months imprisonment for fraudulent billing

2 min read
Former MA sentenced to four months imprisonment for fraudulent billing

Former municipal advisor and principal for Atlanta-based Malachi Financial Products, Porter Bingham, has been sentenced to four months imprisonment, followed by a two-year term of supervised release and ordered to pay restitution of $33,000 following his fraudulent billing of the city of Rolling Fork, Mississippi, in connection with a 2015 bond offering.

He will serve four months of his supervised release on home detention and will also pay a special assessment fee of $100.

Bingham entered into a plea agreement with federal prosecutors in December 2021 when he pleaded guilty to one count of wire fraud. Civil charges were also leveled against Bingham by the Securities and Exchange Commission and he settled in 2018.

According to the criminal charges, Bingham entered into an agreement to act as the city of Rolling Fork’s municipal advisor. The $1.1 million issuance left Bingham and his firm entitled to $22,000 per agreement, but he also billed the city, which has about 2,300 residents, an additional $33,000 for “professional services rendered and expenses incurred as financial advisor to the City of Rolling Fork in connection with the investment of bond proceeds,” a federal grand jury alleged.

But neither Bingham nor anybody else at Malachi Financial Products provided services in connection with the investment of the bond proceeds and he was not legally entitled to the $33,000 payment.

The SEC charged Bingham with violating his fiduciary duty to the city by means of the wire fraud and by failing to disclose a financially beneficial personal relationship he had with employee Anthony Stovall of the broker-dealer firm underwriting the deal, Bonwick Securities.

Stovall agreed to serve a six-month suspension and pay $20,000 to settle SEC charges against him.

Bingham settled the SEC charges against him and agreed to pay a combined $75,000 in civil penalties, $33,000 in disgorgement and $2,858 in prejudgment interest. The commission has also barred Bingham from the industry via administrative order.