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March 10, 2010

Texas sentencing set for Bill Deaton

The Times-Tribune

CORBIN — By Carl Keith Greene / Staff Writer

London businessman Bill Deaton is set to face a Texas magistrate judge on March 18 and plead guilty to conspiring to commit wire fraud.

He faces up to five years in prison, three years of supervised release, a fine up to $250,000 or twice the gain in wealth it may have given him, or loss in wealth of the victims, and costs of incarceration and supervision.

An information filed Feb. 25 in Dallas federal court claims that after selling his London data entry company, Image Entry, to Texas firm, SourceCorp, he and his vice president for finance, Michael Sulfridge, conspired to take more money from SourceCorp than was allotted in the sales contract.

When SourceCorp bought Image Entry, Deaton agreed to stay at Image Entry and be its chief executive officer for three years.

The deal was that Deaton would be paid about $32.8 million at closing, a “hold back” of $11 million to be paid out over a three-year period. Also over that time period would be an earn-out of up to $25 million to be paid to Deaton in three annual installments.

The first two installments were to be paid in years one and two as triple the amount of Image Entry’s earning targets and in the third year, quadruple the amount.

Deaton and Sulfridge allegedly fraudulently inflated Image Entry’s income and by doing so for Deaton’s earn-out.

The money appearing as income from customers allegedly came from non-Image Entry funds held by Deaton.

They also were said to have fraudulently used funds collected for work not done for the National Oceanic and Atmospheric Administration (NOAA).

Image Entry allegedly billed NOAA for verifications of information entry it had not done.

The job was to enter climate and weather information for the United States.

SourceCorp purchased Image Entry on March 31, 2001.

Sulfridge was charged in the conspiracy in the Texas federal court in a similar information on May 6, 2009. He entered on that day a plea agreement.

At arraignment on May 15, he pleaded guilty.

Sentencing has yet to be set.

Deaton’s current address was listed as Ocala, Fla.

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