A federal judge in Pennsylvania has scheduled a criminal trial to begin Dec. 8 for Robert Bradbury, the former head of the defunct underwriter Dolphin & Bradbury Inc., who has been charged by U.S. attorneys with allegedly defrauding four Pennsylvania school districts by selling them unsuitably risky notes between 1998 and 2004.

The notes were to be used to finance the development of a golf course, which failed, causing the school districts to lose $10.5 million.

Judge R. Barclay Surrick, who sitson the U.S. District Court for the Eastern District of Pennsylvania in Philadelphia, set the trial date last week, nearly nine months after the Justice Department announced a nine-count indictment against Bradbury. He faces eight counts of mail fraud and one count of securities fraud. If convicted, he could serve a maximum of 160 years in prison and be required to pay $2 million of fines.

Surrick had earlier scheduled the trial to take place on Oct. 8, but postponed it at the request of Bradbury's attorneys, who asked for more time to prepare.

In the criminal case, the Justice Department claimed that Bradbury repeatedly sold unsuitable notes to the districts only by concealing the true nature of the investments and the risks associated with them.

The investments included $7.5 million of bond anticipation notes sold in 1998 and 1999 by the Dauphin County General Authority to finance the purchase of land and the construction of a golf course that was to be located in Franklin County, Pa. The DCGA notes were unrated and secured by a pledge of proceeds resulting from a planned sale of long-term bonds. They were not secured by the full faith and credit of Dauphin County or any other political entity, and were therefore not lawful investments for the schools under state statutes, the Justice Department said.

The indictment, the first bond-related criminal charges against the former underwriter, are at the top of a list of legal troubles facing Bradbury, who could not be reached for comment Friday.

In a similar civil case involving the school districts, the Securities and Exchange Commission sued him in 2006 for allegedly violating securities fraud laws and its Rule 15c2-12 on disclosure. He was charged with selling the four school districts the risky notes, without any disclosure documents, to finance the Whitetail golf course project, which ultimately went belly up. That case is on hold until after the criminal trial.

Meanwhile, the four school districts - North Penn School District, Boyertown Area School District, Perkiomen Valley School District, and Red Lion Area School District, which are located in and around Philadelphia - filed nearly identical lawsuits in state court. Their suits, which are pending before a court in Pennsylvania's Montgomery County, also is not proceeding until the criminal trial wraps up, an attorney who represents one of the school districts has said.

In a separate legal matter, a federal appeals court here ruled against Bradbury and his firm in January, refusing to overturn the SEC's finding that they were extremely reckless in failing to disclose key information about bonds an authority sold in 1998 to acquire an office building in Harrisburg. Without the denying the SEC's facts in the case, Bradbury argued that his behavior did not rise to the legal definition of recklessness because there was no intent to deceive investors.

The case revolved around $75.35 million of bonds the DCGA issued in 1998 to acquire the Forum Place office building. The SEC enforcement staff charged Bradbury and the firm violated the Municipal Securities Rulemaking Board's Rule G-17 on fair dealing, as well as the securities law that prohibits such violations, by failing to disclose in the bond documents that the building's main tenant - the Pennsylvania Department of Transportation - planned to move out of the building a few years after the bonds were issued. PennDOT occupied 79% of the space in Forum Place and generated 60% of its lease revenues.

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