SEC charges former Ky. Lt. Gov. with fraud

Posted at 7:44 PM, Sep 09, 2015
and last updated 2015-09-09 19:44:42-04

WASHINGTON (AP) — U.S. regulators have filed civil fraud charges against a former federal prosecutor and Kentucky lieutenant governor, saying he misled auditors about missing funds as chairman of an employment staffing company.

The Securities and Exchange Commission alleged that Steve Pence, who was majority shareholder and chairman of General Employment Enterprises and served as Lieutenant Governor under Ernie Fletcher from 2003-2007, acted as front man for a convicted felon who schemed to divert $2.3 million from the company.

Pence "had nothing to do with that, had no knowledge of" the missing funds, his attorney, Michael Valenti, said by telephone Wednesday. Valenti said Pence will contest the charges.

The SEC settled separate charges with big accounting firm BDO for missing red flags and issuing misleading audits of General Employment. BDO is paying a $1.5 million fine and returning about $600,000 in audit fees.