- The Washington Times - Tuesday, October 31, 2006

The founder of a D.C. security firm that has become bankrupt was sentenced yesterday to eight months’ home detention and five years’ probation for illegally diverting hundreds of thousands of dollars from a payroll account.

Jeffrey N. Jackson, 44, a former chief executive of Unlimited Security Inc. and part-time boxing promoter, also was ordered to pay $361,000 in restitution.

He was sentenced in U.S. District Court in the District.

Jackson and his brother founded Unlimited Security in the early 1990s. Within a decade, the company had hundreds of employees and tens of millions of dollars in federal and city security contracts.

But the company went bankrupt in 2002. According to bankruptcy filings, the company’s finances were entangled with Jackson’s boxing-promotions business.

Earlier this year, Jackson pleaded guilty to one count of bankruptcy fraud, admitting that in 2003, he illegally diverted more than $370,000 from a payroll account.

Charging documents stated that Jackson took the money “for his personal use, primarily for the funding of a private professional boxing promotion business.”

The Washington Times first reported on the company’s questionable expenses and financial troubles last year.

Yesterday, Jackson, the one-time promoter for former heavyweight boxing champion Riddick Bowe, said that he took the payroll money to help keep the company afloat.

“I wanted to do something to get the company out of bankruptcy,” he said.

He said he wasn’t prepared for his company’s fast rise and fall.

“Success came so quickly that I didn’t realize the situation I was in,” Jackson said.

In allowing Jackson to remain out of prison, U.S. District Court Judge Ricardo M. Urbina departed significantly from federal sentencing guidelines.

The guidelines had called for Jackson to receive at least two years in prison.

Prosecutors thought Jackson should go to prison.

“This case, although it is a financial case, involves the integrity of the bankruptcy system,” Assistant U.S. Attorney Daniel Butler said.

Defense attorney G. Allen Dale said that Jackson quickly admitted his guilt and has been making restitution.

“The crime was not one to benefit himself personally,” Mr. Dale said.

Judge Urbina cited a recommendation from U.S. probation officer Kelly Kraemer-Soares that Jackson should not go to prison.

He also said Jackson’s job as an executive at District-based Innovative Security would help him repay his debt faster.

The judge warned Jackson that he would sentence him to the maximum five years in prison if Jackson fails to adhere to guidelines of probation.

Jackson also was sentenced to undergo weekly drug tests and complete 250 hours of community service.

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