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Former Medford financial consultant sentenced to probation By DANI DODGE Mail Tribune Former Medford financial consultant Lew Aytes has been sentenced to a probation that includes home detention for failing to report all his income on tax returns. In November, Aytes pleaded guilty to three misdemeanor counts of filing false income tax returns in 1993, 1994 and 1995. He faced a possible three-year prison sentence on the charges. At an April 15 hearing in Portland, U.S. District Judge Anna J. Brown sentenced Aytes to five years' probation, including six months of home detention and he was ordered to pay back taxes. A final figure for back taxes has not been determined. Aytes was employed as a financial consultant by the investment firm now known as Salomon Smith Barney from 1992 through 1994. He first came under scrutiny in 1996 when allegations of investment fraud surfaced at the firm's Medford branch. During his employment at the investment firm, Aytes assisted clients who acquired securities called limited partnership units, of which he received a share of the proceeds. He did not include all of the income from these transactions on his taxes for the years he worked at the firm. Bill Smith, branch manager for Salomon Smith Barney in Medford, said he was pleased with the outcome of Aytes' sentencing. "Justice was a long time coming in this case, but justice was finally served," Smith said. Assistant federal public defender Mark Weintraub said the case started after Aytes was hired away from Salomon Smith Barney to start a new office. "Several employees went with Aytes to the new office and took a lot of business with them and Smith Barney didn't care for that much," Weintraub said. "That's what started the conflict between Smith Barney and Mr. Aytes. "There has never been any finding he has engaged in any wrongdoing other than these misdemeanor tax violations." In a separate investigation, the National Association of Securities Dealers in 1997 fined Aytes $100,000 and suspended him for 18 months, saying he overcharged clients. The NASD also fined and suspended another broker. Smith, the firm's manager, was fined $20,000 for failing to properly supervise the brokers. Weintraub said NASD's investigation only found technical violations by Aytes "that resulted in an agreement by Mr. Aytes (and the agency) to a temporary suspension of his license." Weintraub said that the six months of home detention mean that Aytes, 52, will have to stay at his California home when he is not working or doing other activities approved by the court. "He can go to work every day," Weintraub said. "It was important to the judge he continue working." Weintraub said Aytes is now working for a business doing financial work but declined to be specific. Reach reporter Dani Dodge at 776-4471, or e-mail [email protected] Mail Tribune Home | Ottaway Newspapers, Inc. | Dow Jones & Co., Inc. | Privacy | Contact Us Copyright � 2001 Mail Tribune, Inc.