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Politics and Economy:
Corporate Scandal and Reform
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Many viewers wrote in wanting to know what has happened to all those corporate scandals we were hearing so much about a few months ago. For some general tracking information, offers The Corporate Scandal Sheet. Note that this chart ceased being updated as of September 2002.

Find out what's happening to some of the other corporate executives embroiled in scandal:

From the Buffalo News, April 9, 2003:
John J. Rigas, his sons Timothy and Michael, and former assistant treasurer Michael C. Mulcahey "are accused of massive fraud that cost Adelphia, the nation's sixth-largest cable company, $2.5 billion, driving the company into bankruptcy."

"Prosecutors say the Rigases used Adelphia as their personal piggy bank, taking money from the company for lavish vacations and other personal uses, while misleading investors about the state of the company's finances."

Rigas and the other defendants have maintained their innocence, arguing that Adelphia's directors approved the majority of the transactions in question. The trial is set to begin next January.

  • "Fallen Founder of Adelphia Tries to Explain," April 7, 2003

    Arthur Andersen and Enron
    On May 1, 2003 an additional round of charges came down in the Enron case. Former Enron finance chief Andrew Fastow, and his wife Lea are accused of skimming profits from the company's wind farm operations and tax evasion. In addition, treasurer Ben Glisan and former finance executive Dan Boyle have been charged with securities fraud, insider trading, falsification of accounting and tax records. Seven former members of Enron's broadband and internet group have been charged with securities fraud, wire fraud, and money laundering.

    Kevin Howard, former chief financial officer of Enron Broadband Services, and Michael Krautz, the business unit's former senior accounting director, pleaded not guilty this month to charges of fraud, conspiracy and lying to the government in an accounting scam involving the company's Internet business.

    These are the 11th and 12th charges in the investigations of Enron. Accounting firm Arthur Andersen was sentenced to a $500,000 fine and five years' probation in October for obstruction of justice in an Enron-related investigation. Andersen has appealed the case.

    Four former Enron employees and former Arthur Andersen accountant David Duncan have pleaded guilty to various charges and are cooperating with investigators. Former Chief Financial Officer Andrew Fastow has been indicted on 78 counts, and three former British bankers have been indicted in connection with an Enron deal.

  • Full coverage of Enron from the archives of the Houston Chronicle
  • Full coverage of Arthur Andersen from the archives of the Houston Chronicle

    Global Crossing
    On Christmas Eve of 2002, the U.S. Department of Justice announced that it would not seek the indictment of Gary Winnick, founder and chairman of Global Crossing, a Bermuda-based company that built a 100,000-mile fiber-optic network connecting more than 200 cities in 27 countries. Winnick sold $734 million worth of stock, including $123 million in the weeks before the telecommunications company began to collapse.

    ImClone Systems Inc.
    Sam Waksal, former CEO, was charged last year with insider trading, and pleaded guilty to six counts, including bank fraud, securities fraud, conspiracy to obstruct justice, and perjury. The latest news from Reuters reports that securities regulators are investigating some tax issues involving ImClone - Waksal reportedly owes $23.3 million in taxes.

  • "ImClone Says SEC Opens Tax Probe," April 9, 2003

    As of this month, Tyco International Ltd. has filed a $400 million lawsuit against former chief financial officer Mark Swartz, claiming he looted the conglomerate for his personal gain.

    Swartz already faces criminal charges of corruption, conspiracy, grand larceny and falsifying records filed by government prosecutors, who say he and former CEO L. Dennis Kozlowski stole $600 million from Tyco. Former general counsel Mark Belnick was also indicted. Trial is tentatively set for June 2003. While these three have pleaded innocent, former Tyco director Frank Walsh has pleaded guilty to fraud.

    Tyco has asked a federal judge to dismiss securities fraud claims against the company, arguing that the troubled conglomerate was the victim of deceit by former senior executives, according to court papers.

  • Tyco Fraud InfoCenter

    Judge Robert Blackburn has granted defense lawyers more time to prepare for the criminal case against four former Qwest Communications International executives accused of fraud. Former CFO Grant Graham, former senior vice president Thomas Hall, former assistant controller Bryan Treadway, and former vice president John Walker have pleaded innocent to artificially inflating Qwest revenues to meet Wall Street targets. The Associated Press reports that "each was accused in a 12-count indictment of seeking to create more than $33 million in revenue by wrongly reporting a purchase order with the Arizona School Facilities Board. Four of the counts each carry a penalty of 10 years in prison and a $1 million fine. The others are punishable by five years in prison and a $250,000 fine."

  • U.S. Department of Justice release on Qwest indictments

    Lawyers for Scott Sullivan, former CFO, indicted on fraud and conspiracy charges, sought a change of case venue from New York to Washington, and dismissal of six of the seven counts relating to the company's $9 billion accounting scandal. In January, 2003, a federal judge refused to dismiss the charges or move the case, and set a tentative trial date of September 8. — Reuters, January 22, 2003

    In addition, four individuals formerly involved with WorldCom's accounting have pleaded guilty to related charges: controller David Myers, director of general accounting Buford Yates Jr., director of management and reporting Betty Vinson, and director of legal entity accounting Troy Norman. — Bank & Lender Liability Litigation Reporter, March 20, 2003

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