Business Crimes Hotline

CALIFORNIA

Four Executives Agree to Plead Guilty in International DRAM Price-Fixing Conspiracy

Four executives at Infineon Technologies AG and its subsidiary, Infineon Technologies North America Corporation, a German manufacturer of dynamic random access memory (DRAM), agreed to plead guilty to participating in an international conspiracy to fix prices in the DRAM market. DRAM is the most commonly used semiconductor memory product, providing high-speed storage and retrieval of electronic information for a wide variety of computer and consumer electronic products.

The four executives, Heinrich Florian, Gnter Hefner, Peter Schaefer, and T. Rudd Corwin, allegedly participated in a conspiracy to fix the prices of DRAM sold to certain computer and server manufacturers by agreeing to charge certain prices for DRAM, issuing price quotations in accordance with the agreement, and exchanging information on sales for the purpose of monitoring the agreement.

Each of the executives agreed to pay a criminal fine and serve prison terms ranging from four to six months. Earlier, Infineon Technologies AG pled guilty to a charge of participating in the same conspiracy. In addition, the DOJ continues to investigate possible price fixing in the DRAM market.

Former Network Associates Executive Charged with Securities Fraud

A former Network Associates Controller, Evan Collins, was charged with one count of insider trading based on stock sales he made in November 2000. Network Associates is a Santa Clara, California based software manufacturing firm now known as McAfee, Inc.

According to the Information, between September and November 2000, Collins learned that several Network Associates executives were involved in a scheme to illegally manipulate the company's financial statements. Upon learning this information, he exercised his options to acquire and sell 30,000 shares of Network Associates stock, realizing proceeds of approximately $250,000. Collins allegedly exercised his options because he believed the company would not meet its 4th quarter 2000 earnings estimates and that the company's books did not comply with GAAP.

The SEC also filed a civil action against Collins. In addition, two other former Network Associates executives have been charged with securities fraud arising out of allegedly fraudulent financial statements submitted in 1999 and 2000.

NEW YORK

Supply Company Executive Charged in Scheme to Defraud Con Ed

Glenn Testa, the Vice President of Dependable Industrial Supply Company, was indicted in connection with his alleged participation in a scheme to defraud Consolidated Edison Company (Con Ed). Testa was charged with conspiracy, mail fraud, and commercial bribery.

According to the Indictment, Dependable supplied Con Ed with an industrial grease product that Con Ed used to pull underground electrical cables. Certain authorized Con Ed employees could place orders for the industrial grease product over a Con Ed computer, and the orders would then be electronically transmitted to Dependable. Testa had primary responsibility for the Con Ed sales account and oversaw the filling of all such orders from Con Ed to Dependable. He allegedly engaged in a scheme to defraud Con Ed by repeatedly instructing a Con Ed employee to place orders for the industrial grease product, which Dependable never intended to deliver to Con Ed. Testa allegedly made numerous cash payments to the employee in exchange for placing the bogus orders.

TENNESSEE

Businessman Charged with Witness Tampering

J. Howard Ragsdale, a Tennessee businessman, was charged with witness tampering in violation of 18 U.S.C. '  1512(b). Ragsdale allegedly attempted to tamper with a witness referred to as “CS1″ (cooperating source 1) in an affidavit filed by the FBI. CS1 had been contacted by the FBI with respect to the possible illegal transfer of intellectual property from AIM Healthcare to Arbor Healthcare.

According to the Criminal Complaint, CS1 informed Ragsdale and an alleged co-conspirator at a meeting that the FBI had attempted to contact him. The next day all three met again. During that conversation, Ragsdale and CS1 discussed the manner in which CS1 should respond to any questions posed by the FBI. Ragsdale also urged CS1 to claim a faulty memory, and informed CS1 of the benefits of staying out of the suit between AIM and Arbor and the FBI investigation.

CALIFORNIA

Four Executives Agree to Plead Guilty in International DRAM Price-Fixing Conspiracy

Four executives at Infineon Technologies AG and its subsidiary, Infineon Technologies North America Corporation, a German manufacturer of dynamic random access memory (DRAM), agreed to plead guilty to participating in an international conspiracy to fix prices in the DRAM market. DRAM is the most commonly used semiconductor memory product, providing high-speed storage and retrieval of electronic information for a wide variety of computer and consumer electronic products.

The four executives, Heinrich Florian, Gnter Hefner, Peter Schaefer, and T. Rudd Corwin, allegedly participated in a conspiracy to fix the prices of DRAM sold to certain computer and server manufacturers by agreeing to charge certain prices for DRAM, issuing price quotations in accordance with the agreement, and exchanging information on sales for the purpose of monitoring the agreement.

Each of the executives agreed to pay a criminal fine and serve prison terms ranging from four to six months. Earlier, Infineon Technologies AG pled guilty to a charge of participating in the same conspiracy. In addition, the DOJ continues to investigate possible price fixing in the DRAM market.

Former Network Associates Executive Charged with Securities Fraud

A former Network Associates Controller, Evan Collins, was charged with one count of insider trading based on stock sales he made in November 2000. Network Associates is a Santa Clara, California based software manufacturing firm now known as McAfee, Inc.

According to the Information, between September and November 2000, Collins learned that several Network Associates executives were involved in a scheme to illegally manipulate the company's financial statements. Upon learning this information, he exercised his options to acquire and sell 30,000 shares of Network Associates stock, realizing proceeds of approximately $250,000. Collins allegedly exercised his options because he believed the company would not meet its 4th quarter 2000 earnings estimates and that the company's books did not comply with GAAP.

The SEC also filed a civil action against Collins. In addition, two other former Network Associates executives have been charged with securities fraud arising out of allegedly fraudulent financial statements submitted in 1999 and 2000.

NEW YORK

Supply Company Executive Charged in Scheme to Defraud Con Ed

Glenn Testa, the Vice President of Dependable Industrial Supply Company, was indicted in connection with his alleged participation in a scheme to defraud Consolidated Edison Company (Con Ed). Testa was charged with conspiracy, mail fraud, and commercial bribery.

According to the Indictment, Dependable supplied Con Ed with an industrial grease product that Con Ed used to pull underground electrical cables. Certain authorized Con Ed employees could place orders for the industrial grease product over a Con Ed computer, and the orders would then be electronically transmitted to Dependable. Testa had primary responsibility for the Con Ed sales account and oversaw the filling of all such orders from Con Ed to Dependable. He allegedly engaged in a scheme to defraud Con Ed by repeatedly instructing a Con Ed employee to place orders for the industrial grease product, which Dependable never intended to deliver to Con Ed. Testa allegedly made numerous cash payments to the employee in exchange for placing the bogus orders.

TENNESSEE

Businessman Charged with Witness Tampering

J. Howard Ragsdale, a Tennessee businessman, was charged with witness tampering in violation of 18 U.S.C. '  1512(b). Ragsdale allegedly attempted to tamper with a witness referred to as “CS1″ (cooperating source 1) in an affidavit filed by the FBI. CS1 had been contacted by the FBI with respect to the possible illegal transfer of intellectual property from AIM Healthcare to Arbor Healthcare.

According to the Criminal Complaint, CS1 informed Ragsdale and an alleged co-conspirator at a meeting that the FBI had attempted to contact him. The next day all three met again. During that conversation, Ragsdale and CS1 discussed the manner in which CS1 should respond to any questions posed by the FBI. Ragsdale also urged CS1 to claim a faulty memory, and informed CS1 of the benefits of staying out of the suit between AIM and Arbor and the FBI investigation.