Michael Rand, Beazer Homes USA's former chief accounting officer, was indicted by a grand jury, arrested, and is being held on 11 counts on federal charges related to wrongful accounting practices and attempts to conceal them from investigators.

Rand is scheduled to go before a federal judge for a hearing on charges that range from conspiracy to defraud the United States to securities fraud, Friday afternoon in Asheville, N.C.

A Beazer representative reached on Thursday declined to comment on the case, saying that it relates to charges against a former employee, separate from the company.

The arrest is the most recent in a string of investigations and events unleashed in March of 2007, in the wake of a story in the Charlotte Observer newspaper detailing an unusually high rate of home foreclosures in Beazer-built neighborhoods around Charlotte, N.C.

The FBI, the Attorney General of the Western District of North Carolina, and the U.S. Securities and Exchange Commission all launched investigations that Spring, into the allegations of mortgage fraud. What they uncovered was other alleged misdeeds related to accounting practices.

In June 2007 Beazer's board of directors fired Rand for cause after independent legal counsel, hired by Beazer to investigate the fraud charges, unearthed evidence that Rand had committed accounting irregularities and destroyed evidence.

Rand is charged with conspiracy to defraud the United States, obstruction of official proceeding, mail/wire fraud conspiracy, securities fraud for manipulative and deceptive devices, false statement to a bank on loan and credit applications, obstruction of justice for witness tampering, destruction, alteration or falsification of records in federal investigations, and intimidation or force against a witness.

The indictment accuses Rand (along with an unnamed company "co-conspirator") of accounting fraud conspiracy for going against the company's auditors' advice and making an agreement with an unnamed company to buy Beazer's model homes and then lease them back to Beazer. The arrangement allowed Beazer to book the sale of the home while still using it as a model. That arrangement in itself might pass accounting rule muster except that Rand is accused of having a "hidden oral side agreement" with the company to share the profits from the sale of the house when the investor sells it. The indictment says Rand conspired with another Beazer employee (unnamed) and the company (also unnamed) that provided investors to buy the model homes.

The other accounting practice the indictment accuses Rand of is "cookie jar accounting." It says that between 2000 and 2007, Rand worked to smooth out the company's earnings so they would meet goals by squirreling away extra profits in "reserve" accounts during good quarters and pulling them back out in quarters when revenues were expected to fall short.

As evidence, the indictment offers e-mails between Rand and company division executives among others.

The false financials that resulted from the accounting practices were then presented to Wachovia Bank when the company took out a $35 million loan for Beazer to use for the West Morehead project in Charlotte that Beazer has since defaulted on .

After news leaked out that Beazer was being investigated, Rand is accused in the indictment of obstruction of justice and destruction of records by deleting or attempting to delete more than 4,000 e-mails from his Beazer e-mail account from March 23 to March 30, 2007.

When investigators questioned him about the e-mail deletions, the indictment said he first denied the deletions and then offered several other stories about the deletions.

Rand's attorney did not immediately return BIG BUILDER's request for an interview Thursday.