Selinger sentenced to 18 months

ATLANTA -- Two years after Irwin Selinger resumed his position as CEO of Graham-Field Health Products, a federal judge sentenced the longtime HME industry executive to 18 months in prison. Last summer, Selinger, 64, was found guilty of charges that as CEO in 1997 he fraudulently inflated Graham-Field's profits in order to improve the company's financial health in a stock-swap deal for Fuqua Enterprises, the parent company of Lumex. The sentencing shocked Selinger, who is now seeking a stay of the sentence and an appeal of the U.S. District court ruling. U.S. District Court Judge Dennis Hurley gave Selinger 120 days to file his appeal. Selinger is confident that the lower court's ruling will be overturned and has hired a new lawyer, Charles Stillman, to lead the appeal. In the meantime, he spoke with HME News about his situation. HME News: What was your reaction to the sentence? Irwin Selinger: I was absolutely shocked at the sentence, as was my attorney, and quite frankly so was the prosecutor. The judge, before he sentenced me, said, 'Under normal circumstances, you would have probably got 10 months probation but because I have to show other CEOs that we take these things seriously, I am going to give you 18 months.' HME: What's your strategy on appeal? IS: In an appeal, you fight it differently. It's not a court case. It's three judges, who read briefs. They don't look at the facts of the case. They look at the legalities that occur during the case, to see if it's a case they should overturn. We feel very strongly that we have so many appealable issues, but you are only allowed to give 36 pages to the appellate court. We are only going to choose three appealable issues. We feel on all three, that they are very very strong, that we will win this case on all three -- you only have to win on one. HME: In a Newsday article, your attorney Gerald Walpin said [that G-F might go out of business if Selinger was sentenced to jail.] IS: He never was quoted. During my sentencing, Gerry Walpin read a letter to Judge Hurley from Mr. Marx, the largest shareholder in our company, and in that letter, Mr. Marx said, 'Your honor, Mr. Selinger is highly valuable to Graham-Field, and don't think about my personal investment and whether I lose it or not, but think about the 300-plus employees and their 900 family members who earn a living from this company, who would benefit tremendously from Mr. Selinger staying to run this company.' He said, 'I am chairman of the board of a publicly traded bank, so I am one of the most highly regulated human beings. I still believe in Mr. Selinger, and I believe in his honesty. I would ask that you allow Mr. Selinger, however you come up with his sentence, to allow him to continue to run this company so we can continue to protect the jobs of these people, and their family members.' He never said anything further than that. But obviously, there was someone from Newsday sitting in the court, and they interpreted it their way. HME: Do you think the legal challenges you've had over the past couple of years have inhibited G-F's comeback? IS: Probably. I can't say no. There are going to be those customers or potential customers who are going to say 'Irwin Selinger is a convicted felon and we're not going to do business with him.' Having said that, I have been in this industry longer than Mal Mixon, probably longer than anybody else. I'm sure there are others. But I have been in this industry since 1966. People know who I am. The outpouring of friendship, help, has come from the most surprising people within the industry. I would say all my competitors have been incredibly helpful by saying anything we can do to help you, we would like to. HME: Would it make sense for you to step down as CEO of Graham-Field? IS: Let me put it this way. I left the company in early 1998.When I left, the company was sitting on $60 million of cash, $500 million of assets and $100 million of debt. Seven management teams came into this company to run it. They took a company that should never have gone bankrupt. Maybe they had to do some restructuring; quite frankly, I would have done it, some of it. And they brought it down to a point where, when I walked back into the company, it was doing $50 million a year. With all the professional management teams they brought in, all they did was rape the company of its assets and never care about building this company up. The biggest problem with me stepping down is who's going to take over, to be very frank. That is the big problem. This is a very, very unusual industry. Personal relationships, knowledge, relationships with overseas vendors is such that, so far any time you brought in professional management, they have not succeeded. HME: And you've still got the support of your principal backers? IS: I had said to Mo (Moses Marx) after the conviction, 'If you want, we'll work on getting someone else in.' He said, 'Over my dead body.' End of discussion.