Technology, the formerly unassailable Camelot of U.S. industry, is looking more like a shabby betting parlor raided by the vice squad. Once smiling fixtures in the morning paper's society page, tech execs and entrepreneurs are turning up on a different page -- the police beat. In the words of Warren Zevon, send lawyers, guns, and money. Here's a roundup of the latest roundups.
Tuesday, July 30: A nationwide sweep by federal and state law-enforcement officials interrupted 19 Internet scams. Among the busts was an envelope-stuffing scheme that allegedly collected fees from people looking for easy money. Stuffingforcash.com, however, neglected to send out the purchased kits, according to the Federal Trade Commission. An outfit known as Page Creators reportedly was doing some stuffing of its own. The FTC says the firm advertised discounts -- as low as $10 a month -- on hosting services, but then padded customers' credit accounts with unauthorized fees for things such as excess bandwidth use. Defendant Bryan Kruchten agreed to shut down the company and settle with the FTC. And a Chicago man was accused in a civil suit of auctioning items on eBay without actually delivering the goods. A spokeswoman for the Illinois attorney general's office, which filed a civil suit against one Tim Engle, says the office participated in the FTC's raid but continues to go after cyberscammers on its own, too.
Wednesday, July 31: An ex-Cisco Systems exec pleaded guilty to illegally transferring stock and funds valued at $50 million to an offshore shell account in the Bahamas. Palo Alto, Calif., resident Robert Gordon, 43, could face up to 20 years in prison for two counts of wire fraud and one count of insider trading. He allegedly transferred Cisco funds and shares in a company called Internet Security Services Group -- shares owned by Cisco -- into a bank account he created. Gordon, a former VP of business development at Cisco, was fired after he was indicted last year.
Thursday, Aug. 1: Two former WorldCom finance execs were charged with falsifying the company's ledgers. Ex-CFO Scott Sullivan, 40, and ex-controller David Myers, 44, surrendered to the FBI in Manhattan. Sullivan was released after posting a $10 million bond, Myers after posting a $2 million bond. The two are ensnared in WorldCom's alleged $3.8 billion accounting fraud case. Myers, at least, is expected to plead innocent. Sullivan's lawyer says his client is a scapegoat. If convicted, the two face up to 65 years in prison.
Speaking of WorldCom, it has named Gregory Rayburn chief restructuring officer (certain to become a far more common title). John Dubel will take over Sullivan's duties. Both are principals with corporate-restructuring firm AlixPartners. And, interestingly, both are former Arthur Andersen folks from way back. Until recently, Rayburn had been helping struggling global resort owner Sunterra. Dubel also has been involved in pulling companies' cheeks out of the wringer. He came to WorldCom after serving as chief restructuring officer (see, didn't I tell you so?) of wireless telco CellNet Data Systems. Before that, he helped with then-troubled chi-chi retailer Barneys New York and clothing maker Leslie Fay. With my solution-maker hat on, I'm thinking that if things don't go well at WorldCom, Rayburn and Dubel can at least hook up their new telco colleagues with some inexpensive phones, caba?a wear, and a comfy place to hide out.
Where's attorney F. Lee Bailey when you need him? In school, actually. The man who helped free O.J. Simpson is going for his MBA online. Bailey, suffering some financial setbacks of his own, has applied to attend courses at Impac University, an upstart physical and virtual school in Punta Gorda, Fla. Richard LeBlanc, CEO of Impac, says he was as surprised as anyone when, in the middle of a news conference, Bailey blurted out he would be signing up. Bailey had been speaking at a conference at Impac and the media-hungry gentleman wrangled a spot in front of TV cameras.
Bad boys, bad boys. Whatcha gonna do when they come for you? I know. Call me. I'm not a lawyer, but I have every episode of LA Law on tape. I'll fight for you. Especially if you send me or Jack Soat, who's vacationing, a tip. Send it to firstname.lastname@example.org or email@example.com. Or call 516-562-5326.
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.
Top IT Trends to Watch in Financial ServicesIT pros at banks, investment houses, insurance companies, and other financial services organizations are focused on a range of issues, from peer-to-peer lending to cybersecurity to performance, agility, and compliance. It all matters.
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