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Thread: Criminal fraud trial of three ex-Nortel executives begins

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[quote=COOLSPRINGS,454376]Charges include two counts of fraud affecting a public market, two counts of falsifying books and documents and three counts of issuing a materially wrong prospectus.

If convicted, the maximum sentences are 14 years for fraud affecting markets, five years for falsifying accounts and 10 years for filing a false prospectus. Nortel fired the three executives “for cause” in 2004.

“We are confident that the evidence will demonstrate that Mr. Dunn acted honestly and diligently in the interests of Nortel’s shareholders and employees at all times, and that he will be acquitted of these charges,” Dunn’s lawyer, David Porter, of Toronto law firm McCarthy Tétrault, said in a statement after the charges were announced. He declined comment Friday.

The long interval between the filing of charges and the trial reflects the volume of evidence assembled by Nortel, which says it was not targeted by investigators and is co-operating with authorities.

In 2009, the Crown said it had already delivered more than four million documents to the defendants, while the RCMP says it took more than 50 people sorting through electronic data to assemble the case.

The U.S. Securities and Exchange Commission in 2007 filed civil charges against former Nortel executives including Dunn, Beatty, Gollogly and a former vice-president of corporate reporting, MaryAnne Pahapill.

The SEC alleges the former Nortel executives concocted a scheme to improperly book sales and manipulate cash reserves in an effort to bump up Nortel financial results to meet Wall Street expectations and trigger bonus payouts.

“The fraudulent conduct at issue here was egregious and long-running,” said Linda Thomsen, director of the commission’s Division of Enforcement.

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