Former Cisco Exec. Wanted For High-Tech Stock Fraud
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By Brian Krebs, Newsbytes
WASHINGTON, D.C., U.S.A.,
19 Apr 2002, 1:58 PM CST
The FBI is searching for a former Cisco Systems Inc. [NASDAQ:CSCO] vice president who jumped bail after being indicted on charges of stealing more than $22 million in Cisco-owned stock and assets.
Authorities say Robert S. Gordon, a 42-year-old former Cisco executive failed to show up in San Jose Federal Court earlier this week to enter a plea negotiation on wire fraud charges.
Last summer, authorities arrested Gordon for allegedly transferring more than $12 million in Cisco-owned stock - including shares of Microsoft Corp., Cabletron Systems, and Internet Security Services Inc. - to himself at an offshore account in the name of "Cisco Systems Inc., Bahamas."
Authorities also accuse Gordon of orchestrating an elaborate scheme to steal an additional $10 million in Cisco assets.
Gordon was responsible for company relations with Spanlink, a Cisco-affiliated startup company. According to the indictment, he was contacted by Spanlink's chairman of the board, who requested that Cisco provide funding to keep Spanlink operational.
Gordon allegedly did not discuss the request with Cisco, but instead told Spanlink that Cisco would arrange for a $5 million equity exchange deal with venture capital firm Bay Star Capital.
Yet, authorities said Bay Star had no knowledge of the deal, and that Gordon provided the $5 million on his own. Gordon then allegedly arranged for Cisco to issue a $10 million loan to Spanlink, and told the startup to use the money to redeem the stock it had given to Bay Star, and to use the remaining $5 million as working capital.
As a result, Spanlink transferred $10 million to an account Gordon controlled in Bermuda, the indictment alleges.
The U.S. Attorney's Office for the Northern District of California has since asked the federal judge overseeing for permission to recover Gordon's $5 million bail bond. Authorities also have seized nearly $17 million from Gordon's various accounts.
Gordon's attorney could not be immediately reached for comment.
Gordon faces penalties of up to ten years in prison and up to $500,000 in fines. |
