Former Nortel CFO accused of $3.2bn accounting fraud
Canadian firm co-operates with court case into charges CFO and fellow senior executives inflated sales orders
Nortel Networks Corporation’s chief financial officer, Douglas Beatty, has
been charged with fraud for misstating the company’s financial results in 2002
and 2003.
He is one of the company’s three former executives, including chief executive
officer Frank Dunn, to appear in court today over fraud charges, the Royal
Canadian Mounted Police said in a statement.
Each is charged with two counts of fraud affecting public markets, two counts
of falsifying books and documents, and three counts of filing a false
prospectus, reports
Bloomberg.
Toronto-based Nortel, North America’s biggest maker of phone gear, was
accused in lawsuits of a $3.2 bn (£1.6 bn) accounting fraud that included
improperly boosting sales by accelerating the booking of fiber-optic equipment
contracts. The accusations led Nortel to fire Dunn, Beatty and Gollogly in 2004.
The company said it has ‘fully cooperated’ with the police and ‘will continue
to do so’ over the case.
McCarthy Tetrault, the law firm representing Dunn, said it expects him to be
acquitted. Dunn has sued Nortel for wrongful dismissal.
Beatty and Gollogly couldn’t immediately be reached for comment.
The maximum sentences in Canada are 14 years for fraud affecting public
markets, five years for falsifying books, and 10 years for filing a false
prospectus.