Resident pleads guilty to fraud

The former president and chief executive officer of a Costa Mesa

sports equipment company pleaded guilty to federal fraud charges

Monday in U.S. District Court, according to Assistant U.S. Atty. Doug

McCormick.

Hubert Allen Jeffreys, 37, of Newport Beach, admitted to lying to

investors about a potential merger between his company, Earthboard

Sports USA, and a nationally recognized shoe company, McCormick said.

Jeffreys collected nearly $2 million from 20 investors after

issuing statements and press releases that indicated a profitable

merger was in the works, McCormick said.

A complaint filed by the Securities and Exchange Commission

alleged that Jeffreys misappropriated investor funds, using them to

buy a waterfront home in Newport Beach, three undeveloped plots in

Lake Havasu, Ariz., a 30-foot fishing boat, a mooring on Catalina

Island and other valuable property.

McCormick would not comment on when Jeffreys became disassociated

from Earthboard. The company has a website, but none of the phone

numbers posted were in service.

Patrick Nagy, a media manager for Black Label, a skateboard

manufacturer based in Costa Mesa, said Monday he knew nothing about

Earthboard.

Nagy, who’s been in the skateboarding business for eight years,

said he knows most local skateboarding companies.

McCormick said that attorney Richard Marmaro is representing

Jeffreys. Marmaro could not be reached for comment Monday.

From December 2001 through May 2003, Jeffreys made statements

about a prospective merger between Earthboard and a “publicly traded

major footwear company,” McCormick said.

Earthboard’s investors and potential investors believed the

unnamed shoe company to be Vans, a company with stock trading at $15

a share, McCormick said.

Vans never had any intention to acquire Earthboard, McCormick

said.

After pleading guilty to one count of securities fraud, Jeffreys

faces a maximum of 20 years in federal prison and a potential fine of

$5 million, McCormick said.

Jeffreys is scheduled to be sentenced Dec.12.