Former CEO of KIT Digital, Found Guilty on All Charges, Get 3-Years Probation
Kaleil Isaza Tuzman, the former CEO of KIT Digital who was found guilty of market manipulation, wire fraud, defrauding shareholders, and accounting fraud was sentenced on September 10th to three years probation by the judge in the case. This is astonishing as the prosecutors had sought a sentencing of 17-1/2 to 22 years in prison. The judge also ordered three years of supervised release.
U.S. District Judge Paul Gardephe sentenced Kaleil to only probation, saying the 10 months Kaleil spent in Colombian prisons was so horrible it would put him at little risk of committing further crimes. “The risk associated with sending Mr. Tuzman back to prison, the risk to his mental health, is just too great,” Gardephe said. “While in many other cases it has been my practice to sentence white-collar defendants for these sorts of crimes to a substantial sentence, in good conscience I can’t do that here.”
It’s sad state of affairs in our legal system when someone who defrauded investors, lied, cost many employees to lose their jobs and was found guilty on every charge, gets probation. Reading through some of the legal filings, there appears to be more to the story though on what might have impacted his sentence. In a Supplemental Sentencing Memorandum filed on July 7th of this year, it says:
“While incarcerated and during the five years since his release from prison, Kaleil has repeatedly provided material and substantial assistance to the Anti-Corruption Unit of the Colombian Attorney General’s Office, which ultimately resulted in the indictment of a number of government officials in the Colombian National Prison Institute known as “INPEC” (Instituto Nacional Penitenciario y Carcelario)—including the prior warden of La Picota prison, César Augusto Ceballos—on dozens of charges of extortion, assault and murder.” So one wonders if he got a lighter sentence due to information he was providing to the Colombian government.
On the civil side, Kaleil is still being sued by investors in a hotel project who accuse him of stealing $5.4 million and in May 2021, a similar suit was filed in U.S. federal court, asking for $6 million.
For a history of what went on on KIT Digital, you see read my post here from 2013, “Insiders Detail Accounting Irregularities At KIT Digital, Rumors Of A Possible SEC Fraud Investigation“.