The Securities and Exchange Commission has filed charges against former execs of three California software companies, claiming they engaged in accounting fraud to make their companies look healthier than they were. The U.S. Attorney's Office for Northern California revealed additional criminal charges against the former officers of two of the firms.
Alan Anderson, the former CEO of CRM vendor Quintus Corp., faces charges he personally forged contracts, E-mails, purchase orders, letters, and audit records in order to boost Quintus' financial results from December 1999 through October 2000. He also allegedly created three falsified transactions that ranged in value from $2 million to $7 million, for a total of $13.7 million in nonexistent sales. The SEC claims Anderson also improperly recognized as revenue $3 million on a barter transaction that was contingent on Quintus' purchase of $4 million of products from its customer. Federal criminal charges have been filed against Anderson.
Database-management software vendor Unify Corp.'s former CEO Gholamreza Mikailli and former CFO Gary Pado are charged with fraudulently recognizing revenue on transactions that they knew were subject to contingencies such as the right of return or cancellation, or involved barter transactions, from May 1999 to May 2000. The SEC also alleges that Mikailli and Pado engaged in a scheme called "round tripping," in which Unify provided funds that its customers needed to buy Unify products with no reasonable expectation that the customers would repay the funds. Federal criminal charges have been filed against Mikailli and Pado.
Storage-management software vendor Legato Systems Inc.'s former executive VP of worldwide sales, David Malmstedt, and former VP of North American sales, Mark Huetteman, are charged with fraudulently recording millions of dollars in revenue from May 1999 to December 2000 on orders that were contingent on resellers' ability to sell the product to an end customer or on customers' rights of exchange, return, or cancellation. The SEC says Legato overstated revenue over three fiscal quarters in amounts ranging from 6% to 20% per quarter.
5 Top Federal Initiatives For 2015As InformationWeek Government readers were busy firming up their fiscal year 2015 budgets, we asked them to rate more than 30 IT initiatives in terms of importance and current leadership focus. No surprise, among more than 30 options, security is No. 1. After that, things get less predictable.