On November 8, 2017, Brian Block, the former Chief Financial Officer of American Realty Capital Partners (“ARCP”), was sentenced to 18 months in prison for inflating a key metric used to evaluate the financial performance of publicly traded REITs in ARCP’s filings with the SEC.  Block was convicted by a jury in June, following a three-week trial before U.S. District Judge J. Paul Oetken.  According to the indictment and evidence presented at trial, Block and former Chief Accounting Officer Lisa McAlister learned that ARCP had erroneously inflated its earnings per share in its Q1 2014 SEC filing.  Rather than notifying the ARCP Board Audit Committee or the firm’s outside auditors, Block and McAlister then knowingly facilitated the same misleading calculations which had led to the overstated earnings in Q1 2014, thereby fraudulently inflating reported earnings in Q2 2014.  In addition to prison, Block was sentenced to three years of supervised release and a $100,000 fine.  U.S. v. Block, 16-cr-00595 (S.D.N.Y.)

DOJ Press Release

Related Proceeding Post