Entellium CEO Pleads Guilty, Faces 4 or 5 Years in the Hoosegow
| Posted on: December 11th, 2008 |
That was quick. The former CEO of venture-backed Entellium, Paul Johnston, pleaded guilty today to one count of wire fraud under an agreement with federal prosecutors who are planning to drop all other allegations against him. Under the terms of the agreement, Johnston is looking at between a four- and five-year prison term and will likely be deported to his native U.K. afterward.
He’ll be sentenced in March in Seattle, where Entellium was based.
As readers may recall, Johnston and Entellium’s former CFO, Parrish Jones, were arrested in October for keeping two sets of books at the software company – one with the company’s real numbers, and another with inflated figures that it showed to everyone else, including its venture backers Ignition Partners, Intel Capital, Sigma Partners, and WestRiver Capital, which gave Entellium close to $50 million over an eight-year period. The fraud was initially discovered by an employee who stumbled across the financial information in the desk of a former sales VP.
TechFlash has many more details, including a bittersweet quote by the prosecuting attorney involved with the case, Carl Blackstone. Said Blackstone, “Mr. Johnston appeared to be — with the exception of lying about revenue — a respected businessman, and he was trying to make the company successful.”
Intuit has been said to be interested in the remaining assets of Entellium, which makes customer-relationship-management software and laid off pretty much everyone soon after Johnston and Parrish submitted their resignations. No formal announcement has been made yet, however.
No comments:
Post a Comment