Hello all,
About two years ago Rich Wokutch posted a message to this list regarding
a potential guest speaker who had pled guilty to securities' fraud and
was awaiting sentencing. "Tom" had been the CFO for a dot-com company
and had gone along with a scheme for cooking the books when the
company's revenues declined. He had offered to speak to MBA students so
that they could "learn from his mistakes." Tom spoke at my class at the
University of Pittsburgh, Rich's class at Virginia Tech, and at other
classes at many other schools, including speaking at the classes of
several other members of this listserv. He had an interesting story and
was someone that MBA students could identify with, given that he is
close in age to them and an MBA graduate himself. He was an honor
student both in his undergraduate and graduate programs at prestigious
institutions and spent two years with the Peace Corps in Africa between
the two. During this past weekend at the IABS conference I discovered
many people, including some of those who had him speak, did not learn of
the final outcome of the case, so I am sending this update.
Tom's sentencing hearing had been rescheduled many times, but finally
took place in early December of last year. The hearing was here in Los
Angeles and he asked me and some other professors to attend to support
his request for a reduced sentence as compared to what the government
sought. Besides me there were professors representing CMU, Rice,
Pepperdine, and USC. Tom was sentenced to 18 months in prison and 9
months of home confinement. The maximum potential sentence was 60
months, so he received substantially less time than the maximum.
Apparently he had already paid over $400,000 to his former company's
creditors and to the court, which "represents the lion's share" of what
he was paid while at the company. He also provided about 2,200 hours of
service to the government on this case and related cases. Tom was
required to enter prison in early February.
The tension was high in the courtroom during the hearing. I wish future
students could experience the courtroom's atmosphere that day as I am
sure it would be an effective deterrent to legal and ethical breaches in
the future. This was particularly highlighted when, just as the judge
was starting to read the sentence, the defendants for the next case were
led into the courtroom in prison jumpsuits and chains.
While most of the discussion that day was a lot of boring legalese, one
interesting facet of the case came out. From what the attorneys said,
Tom was much more involved in the scheme over a much longer time period
than I gathered from Tom's talk and my discussions with him. I hope when
he gets out of prison he will still be willing to talk about this
situation as I believe we can learn much more from him, especially since
he will no longer be under attorney-imposed limits regarding what he can
discuss.
The Department of Justice press release on the sentencing is available
at:
http://www.usdoj.gov/usao/cac/pr2005/162.html
Ron
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