Graham-Field Chief Sentenced to Prison, Plans Appeal

ATLANTA–GF Health Products’ president and CEO Irwin Selinger,
convicted of conspiracy and securities fraud last summer, has been
sentenced to 18 months in prison and three years probation by a
federal court judge in Central Islip, N.Y.

After the sentencing by U.S. District Court Judge Denis Hurley,
Selinger stated that he “strongly contests his conviction and
intends to seek an immediate stay of his sentence pending his
appeal before the U.S. Court of Appeals,” according to a company
statement.

The original indictment charged Selinger with fraudulently
propping up the company’s profits during a pending 1997 merger deal
with Delaware-based Fuqua Enterprises, the parent company of Lumex.
The transaction depended on Graham-Field’s stock staying above a
certain price, the indictment said.

Although the company did not comment on whether Selinger would
stay on, Lawrence de la Haba, vice president of marketing, said the
company “has been preparing for all possible scenarios for some
time.

“Graham-Field has already implemented a new strategic plan that
involves the creation of three business units reflecting the three
distinct markets in which the company competes,” de la Haba said.
“Each of these units is being managed by a senior executive of the
company. This plan will increase our focus on the customers we
service in the home care, long-term care and primary-care
markets.

“Our main investors have approved the plan and have committed to
provide the necessary financing. The board of directors is excited
about the company’s prospects.”

Since the late 1990s, Graham-Field has filed for and emerged
from bankruptcy, endured an internal audit revealing accounting
irregularities, explored a possible sale, seen frequent
top-management turnover and moved its base operations from Long
Island to Atlanta.

In May 2003, the company announced its reorganization and began
to push back into the home care market, reintroducing its Everest
& Jennings, LaBac, Simmons Healthcare, John Bunn, Grafco,
Labtron and Lumex product lines.