NEW YORK (Legal Newsline) - A New York federal jury convicted three former UBS financial services executives on Friday for their alleged parts in frauds related to bidding for municipal finance contracts.

The jury agreed with evidence that showed municipalities around the country and the U.S. Treasury lost millions of dollars. Peter Ghavami, Gary Heinz and Michael Welty, all former UBS AG executives, were found guilty on conspiracy and fraud charges.

They allegedly deprived municipalities of competitive interest rates for the investment of tax-exempt bond proceeds that were to be used by municipalities to refinance outstanding debt and for various public works projects, such as for building or repairing schools, hospitals and roads.

The public entities wanted to invest money from a variety of sources. They typically hire a broker to assist them in investing their money and to conduct a competitive bidding process to determine the winning provider, said the Department of Justice, which prosecuted the case.

"For years, these executives corrupted the competitive bidding process and defrauded municipalities across the country out of money for important public works projects," said Scott Hammond, Deputy Assistant Attorney General of the Antitrust Division's criminal enforcement program.

"Today's convictions demonstrate that the division is committed to holding accountable those who seek to unfairly and illegally undermine competitive markets."

Ghavami was convicted of two counts of conspiracy to commit wire fraud and one count of substantive wire fraud. Heinz was found guilty on three counts of conspiracy to commit wire fraud and two counts of substantive wire fraud.

Welty was found guilty on three counts of conspiracy to commit wire fraud and on one count of substantive wire fraud. Heinz was acquitted on one count of witness tampering.

Two of the fraud violations carry a maximum penalty per count of 30 years in prison and a $1 million fine. A third fraud conspiracy charge carries a maximum penalty of five years in prison and a $250,000 fine.

The two wire fraud charges carry a maximum penalty per count of 30 years in prison and a $1 million fine. These maximum fines per count may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either amount is greater than the statutory maximum fine.

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