Morgan City man sentenced to 32 months for insider trading, conspiracy

A former Morgan City housing chairman has been sentenced to serve over 2 1/2 years in federal prison in an insider trading case on top of a 15-month sentence for tax evasion.

Victory Ho, 39, of Morgan City, was sentenced Wednesday to 32 months in federal prison following his convictions for securities fraud, commonly known as insider trading, and conspiracy to commit securities fraud, said U.S. Attorney Brandon J. Fremin of the Middle District of Louisiana in a news release.

Ho is a former Morgan City Housing Authority board chairman who resigned from the board in August 2016 after a drug arrest.

District Judge John W. deGravelles sentenced Ho to the prison time and to serve two years of supervised release following his imprisonment. Ho was also ordered to forfeit over $300,000 and pay a $15,000 fine, the release said.

Following a three week trial in May, a jury found Ho and his co-defendants guilty as charged in connection with an insider trading scheme related to the 2012 acquisition of the Shaw Group by Chicago Bridge and Iron Company.

On Aug. 31, Ho was sentenced in U.S. District Court for the Western District of Louisiana to serve 15 months in prison for failing to report over $250,000 in income on his 2012 tax return, a separate news release said.

For filing a false tax return Ho was also sentenced to one year of supervised release and was ordered to pay $69,167 in restitution. According to the May 23 guilty plea, Ho engaged in stock transactions and made $251,196 in 2012, but when he filed his taxes, he reported $14,742 as his income, that release stated.

As a result, he paid no income tax that year, which resulted in a loss of $69,167 to the U.S. Treasury, Western District prosecutors said.

According to evidence presented at Ho’s insider trading trial, in mid-2012, Shaw was considering a potential merger opportunity. At the time, Kelly Liu was a Shaw employee working in the Financial Planning and Analysis Department. In July 2012, Shaw and CB&I came to an agreement on an offer for CB&I to buy Shaw.

The acquisition of Shaw by CB&I was publicly announced July 30, 2012. As a result of the public announcement, Shaw’s stock price rose by around 55 percent, the release said.

The evidence at trial established that, prior to the public announcement and through her job at Shaw, Liu had obtained inside information that Shaw was going to be acquired by another company and had passed the inside information to Ho, through another individual, and to Salvador Russo III for their use in trading Shaw stock and options.

Thereafter, Ho and Russo purchased Shaw stock and options before the public announcement. Ho sold his Shaw options after the public announcement had caused Shaw’s stock price to rise and reaped almost $300,000 from his illegal insider trading, the release said.

During the sentencing hearing, the court found that Ho had obstructed justice through his testimony at the trial.

“Victory Ho is a prime example of someone who, for his own personal benefit, cheated American taxpayers and investors by using information he received illegally,” said Thomas J. Holloman III, special agent in charge, IRS – criminal investigation, in a release.

The insider trading case is being handled by the U.S. Attorney’s Office for the Middle District of Louisiana and the Baton Rouge offices of the FBI, Secret Service, and IRS-Criminal Investigation. It is being prosecuted by Assistant United States Attorneys Chris Dippel and Patricia Jones.