Former Seitel CEO Jailed

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Fri Apr 08, 2005 10:53 pm

I thought the following article rather appropriate for the 'where are they now' forum.

Regards to all,

John Francis
Polar Search GOM

April 8, 2005, 6:14AM

Jail order after verdict surprises former CEO
Jury finds him guilty of swindling $750,000 from Seitel to settle a suit with his ex-fiancee
Copyright 2005 Houston Chronicle

A federal judge sent the former chief executive of Seitel immediately to jail on Thursday pending sentencing after a jury found him guilty of swindling $750,000 from the company to settle a civil lawsuit filed by a former fiancee.

As part of the verdict, Paul Frame Jr., 58, was also ordered by the 12-member jury to forfeit $750,000.

Frame was stunned when U.S. District Judge David Hittner ordered him taken away by U.S. marshals instead of allowing him to remain free on bond. Prosecutors had requested a small increase in his bond.

As he was led away, he softly told his weeping wife, "I'm so sorry."

The former CEO of the Houston seismic data company, who at one time owned a lavish home in River Oaks and earned $400,000 a month, was taken to a federal detention center in Houston.

Frame, now broke, was living in a small apartment in Houston during the 10-day trial, his attorney Katherine Scardino said.

Sentencing is scheduled for July 7, when he faces up to 20 years in federal prison.

Scardino said she plans to appeal the verdict, which found Frame guilty of five counts of fraud. They included one of two counts of mail fraud, two counts of wire fraud, money laundering and making a false statement to the Securities and Exchange Commission.

Scardino said she was "very surprised by the verdict" and thought the jury ignored key evidence that proved $350,000 of the $750,000 was an advance Frame used to pay for the settlement to his former fiancee. She argued that he would repay it.

Records exhibited during the trial revealed the lawsuit was settled for $300,000 and some unnamed gifts were returned.

The defense argued that Seitel agreed to pay $400,000 for lawyer's fees and Frame would pay for the settlement. Seitel denied the arrangement.

Frame maintained he was too busy with the daily duties of being a CEO to follow the paper trail at Seitel. Records show the money was wired to attorneys handling the civil suit.

Scardino said he trusted his employees to monitor such tasks. "He relied on his people," Scardino told jurors. "As it turns out, it wasn't such a smart thing to do."

Jurors, however, sided with the government, which said Frame was cash poor at the time of the civil suit because he had just spent $6 million to renovate his River Oaks home, largely using advances from Seitel.

Prosecutors said he tried to cover up the $750,000 expense to make it look like a general retainer for Franklin, Cardwell and Jones, a law firm working for Seitel that also represented Frame personally in the civil matter.

"That's the scheme," said Quincy Ollison, assistant U.S. attorney in his closing remarks.

While the defense portrayed Frame as a victim who had no intention of committing a crime, prosecutors pictured him as very shrewd and purposeful, introducing evidence such as signatures and e-mails that they said tied him to the transactions.

"He knew what was going on from the very beginning," Ollison said.

Ollison described Frame as "a highly seasoned CEO" who had to be acutely aware that the money was not intended as an advance and that Seitel had no intention of paying his personal legal fees.

"Paul Arthur Frame is not a victim in this case," Ollison said. "Paul Arthur Frame Jr. is a liar and a thief."

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