WENATCHEE — Admitted securities fraudster Jasper C. “Jay” Knabb told a federal judge he will appeal his sentence after pleading guilty to fleecing investors of $30 million.
The appeal notice, filed Thursday, was preceded by the withdrawal of a defamation lawsuit Knabb launched against an East Wenatchee contractor while on his way to prison.
Knabb, 45, of East Wenatchee filed his intent to appeal “from the final judgment” that sent him away for 21 years when U.S. District Judge Jeffrey S. White sentenced him June 7 in San Francisco. The sentence far exceeded the 6 1/2-year term U.S. Attorney John Schmidt recommended when Knabb first entered his plea in 2011, as well as a 17 1/2-year sentence later recommended by a federal probation officer.
Knabb pleaded guilty in U.S. District Court last year to securities fraud, conspiracy to commit securities fraud and maintaining false books and records, carried out when he headed the failing tech firm Pegasus Wireless from 2005 to 2008. He and a partner pocketed about $30 million by pumping up their stock price and selling secretly-held shares at peak value.
The proposed sentence level kept creeping upward as FBI agents probed his finances in their pre-sentencing investigation. Prosecutors said Knabb was evasive about financial matters, including his links to wife Laura Valaas’s ski-accessories business, Skadi Nordic.
Just two days before his sentencing, Knabb sued East Wenatchee electrical contractor Jim Dorsey for slander and breach of contract. Dorsey had performed an estimated $20,000 worth of work in summer 2011 for Skadi Nordic. The business was then located in Knabb and Valaas’s East Wenatchee home.
Dorsey turned the account over to a collections agency last March. He was interviewed in May by FBI agents researching Knabb’s financial dealings.
In his suit against Dorsey, Knabb claimed the contractor’s work was substandard, his billing was inflated, and his statements to investigators and their publication in The Wenatchee World May 22 amounted to slander.
The lawsuit claimed Dorsey spread false statements that harmed Knabb “in other legal proceedings.”
On June 12, five days after Knabb was sentenced in a San Francisco federal courtroom, his Wenatchee attorney Neil Fuller moved to dismiss the case. It was formally withdrawn June 15.
Knabb pleaded guilty in U.S. District Court last year to securities fraud, conspiracy to commit securities fraud and maintaining false books and records, carried out when he headed the failing tech firm Pegasus Wireless from 2005 to 2008. He and a partner pocketed about $30 million by pumping up their stock price and selling secretly-held shares at peak value, while the wireless device they marketed proved defective.
Jefferson Robbins: 664-7123