More Enterasys Execs Get Prison Terms As Government Winds Up Case - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Infrastructure

More Enterasys Execs Get Prison Terms As Government Winds Up Case

Three executives got sentences that range from a year and a day to several years in prison.

Fraud cases involving the telecommunications bubble appear to be entering their final phases as a judge in New Hampshire sentenced three former Enterasys Networks executives to prison terms.

Sentenced Thursday were: Gary M. Workman, the former head of Enterasys's Singapore sales office, to three years and five months; Gayle Spence Lucauw, a former senior executive involved in sales and special projects, to two years and three months and Anthony Hurley, Assistant Controller, to 12 months and one day in prison.

The three executives received leniency from U.S. District Court Judge Paul Barbadoro, because they cooperated with the prosecution in the wide-ranging case against several Enterasys executives, Assistant Attorney General Alice S. Fisher of the Criminal Division and Acting U.S. Attorney Joseph N. Laplante for the District of New Hampshire, said in a release.

In an earlier jury trial, four former Enterasys' executives were found guilty and received prison sentences and fines. The jury, however, was unable to reach a unanimous verdict on the major charges against the fifth defendant in that trial, Enterasys's former Chief Operating Officer Jerry Shanahan.

Prosecutors had argued that the executives had conspired to backdate and falsify documents and conceal material terms of business transactions from Enterasys's auditors in order to inflate the company's revenue. The prosecutors added: "They also fraudulently created revenue by secretly investing company funds in other companies and causing those companies to use the investment proceeds in turn to buy Enterasys products. The court found that, as a result of the fraudulent scheme, public investors lost at least $97 million."

Enterasys executives sentenced earlier received prison terms of from three to eleven years. Included in the earlier sentencing was Enterasys's former Chief Financial Officer, Robert J. Gagalis. Former Enterasys chairman, chief executive officer and president Enrique (Henry) Fiallo, also pleaded guilty to felony charges in connection with the scheme, the U.S. Attorney's Office said, adding that he is scheduled for sentencing in October 2007.

Enterasys was spun off from Cabletron Systems.

The case was prosecuted by Assistant U.S. Attorney Bill Morse for the U.S. Attorney's Office in Concord, and Senior Litigation Counsel Colleen A. Conry from the Fraud Section of the Criminal Division.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
News
Rethinking IT: Tech Investments that Drive Business Growth
Jessica Davis, Senior Editor, Enterprise Apps,  10/3/2019
Slideshows
IT Careers: 12 Job Skills in Demand for 2020
Cynthia Harvey, Freelance Journalist, InformationWeek,  10/1/2019
Commentary
Six Inevitable Technologies and the Milestones They Unlock
Guest Commentary, Guest Commentary,  10/3/2019
White Papers
Register for InformationWeek Newsletters
State of the Cloud
State of the Cloud
Cloud has drastically changed how IT organizations consume and deploy services in the digital age. This research report will delve into public, private and hybrid cloud adoption trends, with a special focus on infrastructure as a service and its role in the enterprise. Find out the challenges organizations are experiencing, and the technologies and strategies they are using to manage and mitigate those challenges today.
Video
Current Issue
Data Science and AI in the Fast Lane
This IT Trend Report will help you gain insight into how quickly and dramatically data science is influencing how enterprises are managed and where they will derive business success. Read the report today!
Slideshows
Flash Poll