Loretta Fredy Bush, the founder and former chief executive officer of the Chinese financial news conglomerate Xinhua Finance, was sentenced to one month in prison for a U.S. tax violation, according to the Wall Street Journal.
Bush founded Xinhua Finance, a company that provided financial news and data for the Chinese market through an agreement with Xinhua news, China’s state-owned news agency. The company and a subsidiary went public on the Tokyo and Nasdaq stock exchanges, respectively, in the following years, and Bush gained a place on a Wall Street Journal “Women to Watch” list alongside Oprah Winfrey and Dolly Parton.
In 2007, however, the Wall Street Journal ran a Page One story highlighting internal company agreements that benefited Bush inappropriately along with two other company directors, Dennis Pelino and Shelly Singhal. Bush subsequently stepped down as CEO of the Shanghai-based Xinhua Finance, now called Xinhua Holdings, Ltd. (TYO:9399).
In 2011, a 10-count indictment was made against Bush, Pelino and Singhal, alleging the three received a financial windfall through company transactions that were undisclosed to the investing public. Most of charges were later dismissed.
Bush and the other defendants accepted a deal and pleaded guilty to a tax charge, which centered on a failure to declare to the Internal Revenue Service the cancelation of debt on loans totaling more than $3 million that Bush and Pelino had obtained through Singhal, an investment banker.
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The judge also sentenced Bush to 150 days of home confinement, the Journal said on Monday. Lawyers for Bush asked that she be allowed to serve time in a halfway house, considering her failing vision.