Ex-mayor Krinos faces charges for securities fraud scheme

CLEVELAND — A Boardman man has been charged in federal court with defrauding investors out of nearly $1.2 million and related tax violations, the U.S. Attorney said today.

George N. Krinos, a former Campbell mayor, was charged in a two-count criminal information with engaging in a securities fraud scheme and willfully failing to collect and pay taxes for his employees.

The information alleges that Krinos, through his various companies known as Krinos Holdings, engaged in a securities fraud scheme, in which he sold through false and deceptive practices securities to numerous northern Ohio victims.

These securities consisted of debenture notes and private placement memoranda that were not properly registered with the Securities and Exchange Commission.

Because the securities were not registered with and therefore subject to greater scrutiny by the SEC, Krinos was limited to selling them to “accredited investors” who were generally individuals having a net worth in excess of $1 million or who met specific, high-dollar income thresholds.

The information alleges that from 2011 through 2014, Krinos sold these unregistered securities to at least 10 Ohio investors, causing them financial losses.

Krinos sold the securities under the pretense that his investors’ funds would be used for legitimate business purposes, including to provide venture capital to various client companies seeking funding from Krinos Holdings.

Rather than use these funds for their intended uses, Krinos instead used the money for personal expenses and to engage in unauthorized foreign currency transactions, the U.S. Attorney said.

The case was investigated by the FBI and the IRS.