Former McAfee CFO convicted of securities fraud
Screen shot courtesy McAfee,
By Julia Cheever
May 11, 2007
A former chief financial officer of McAfee Inc. of Santa Clara
was convicted by a federal jury in San Francisco yesterday of
15 counts related to securities fraud.
Prabhat Goyal, 52, of Los Altos, was chief financial officer
of the computer security company from December 1997 to January
2001. At the time, the company was called Network Associates Inc.
It changed the name to McAfee in 2004.
U.S. Attorney Scott Schools said the 15 counts included securities
fraud, filing false reports with the U.S. Securities and Exchange
Commission and making false statements to auditors.
Goyal was indicted by a federal grand jury in 2004 on a total
of 20 counts. The indictment alleged he schemed with others to
understate company losses by $330 million between 1998 and 2000
through manipulation of financial statements.
Five of the charges, including a conspiracy count, were dropped
by federal prosecutors before the jury trial, which lasted five
weeks in the court of U.S. District Judge Martin Jenkins.
The judge will set a sentencing date at a July 27 hearing on
post-trial motions on July 27.
Each count carries a possible maximum of 10 years in prison,
but the actual penalty will be determined after consideration
of U.S. sentencing guidelines.
Last year, McAfee agree to pay $50 million in penalties to settle
a civil fraud lawsuit filed by the Securities and Exchange Commission,
which alleged the company inflated its net revenue by $622 million
between 1998 and 2000.
In a separate case, former McAfee general counsel Kent Roberts,
50, of Dallas, is awaiting trial in federal court in San Francisco
on seven criminal charges related to alleged backdating of stock
options for himself in 2000 and former chief executive George
Samenuk in 2002.
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