Nortel trial focuses on ‘optics’ of bonus payments
Mon, 01/30/2012 - 15:59 EDT - Financial Post
Drawing on a conversation between Frank Dunn and a senior-ranking finance employee in the spring of 2003, Crown prosecutors attempted Monday to place the former Nortel chief at the centre of an alleged fraud
TORONTO — Three former Nortel executives accused of orchestrating a widespread multimillion-dollar fraud will learn their fate Monday, nearly a year after one of the largest criminal trials in Canada’s corporate history began.
Ontario Superior Court Justice Frank Marrocco is set to rule on whether ex-CEO Frank Dunn, ex-CFO Douglas Beatty and ex-controller Michael Gollogly manipulated financial statements at Nortel Networks Corp., between 2002 to 2003.
How did it get to this stage? How after more than four years of bankruptcy proceedings – and months before the trial that will decide how the so-called global estate of Nortel Networks should be divided up between the competing claims gets underway – did Justice Morawetz of the Ontario Court of Justice make an amazing comment?
The final executive to lead now-defunct Nortel Networks Corp. has few regrets when he looks back at his tumultuous four years at the helm of the once-mighty Canadian telecom giant. “I do not look back with anything, except that we gave it everything we had and unfortunately, sometimes in business things don’t turn out,” said Mike Zafirovski, Nortel’s 60-year-old former CEO during an interview this week.
The four-and-a-half-year winding down of Nortel Networks Corp. is the gift that just keeps on giving – to lawyers, accountants, and small armies of insolvency practitioners on at least three continents. To date, US$915-million has been spent on professional fees and disbursements — US$268-million of that to hired guns in Canada — to clean up the corporate mess ever since the once-mighty Canadian telecommunications equipment maker filed for bankruptcy protection from creditors in January, 2009.
The Crown’s first witness in the trial of former Nortel executives on Tuesday testified that he solicited accounting entries early in January 2003 that had the effect of transforming an unexpected quarterly profit into a loss
MANHATTAN — A former Bank of Montreal trader avoided jail by helping U.S. prosecutors investigate a fraud that resulted in a record-trading loss for a Canadian bank and a guilty plea by Kevin Cassidy, the former CEO of Optionable Inc.
David P. Lee, a natural-gas trader at the bank from 2001 to 2007, was ordered to pay almost US$14.2 million in restitution on Monday by U.S. District Judge Loretta Preska in Manhattan.
Bernard Madoff’s former computer programmers asked for payment in diamonds to continue aiding the con man’s US$17 billion Ponzi scheme in 2006 after they became uncomfortable with their role, a jury was told.
The “crazy” request from Jerome O’Hara and George Perez was turned down and the men were paid with salary increases and bonuses, Frank DiPascali, Madoff’s former finance chief, testified today in Manhattan federal court in the trial of the men and three other ex-colleagues.
Where the hell am I gonna get a bag of diamonds?
Mired in a widening probe to clear a bulge of accounting provisions from Nortel's balance sheet in 2003, the company's auditors missed tens of millions of dollars more in irregular items being targeted for the bottom line, a fraud trial heard here Wednesday