Cough up $27m, appeals court orders disgraced Cisco exec
The Great Stock and Roll Swindle
A disgraced former Cisco exec has failed in his bid from behind bars to reduce the amount he will have to repay for swindling his former employers.
A federal appeals court last week upheld most of the $27.4m restitution order against Robert Gordon imposed when he was jailed for five and a half years in 2003 for masterminding an elaborate fraud against Cisco. The scam involved diverting $50m of Cisco-owned stock through overseas accounts controlled by Gordon.
Gordon paid Cisco $18m, and around $7m in fines and restitution to the US government prior to his January 2003 sentencing hearing. He saved taxpayers the costs of an expensive trial by pleading guilty to two counts of wire fraud, and one charge of using inside information to make an illicit profit from stock deals. But that failed to cut much ice with US District Judge Jeremy Fogel who imposed a tough prison sentence and restitution order against the wayward executive.
Gordon appealed against the amount he has to pay Cisco arguing that its losses had been overstated. Although the appeal court ordered a recalculation of estimated interest charges of $2.4m, it upheld the $27.4m charge imposed by the lower court.
"This case presents the disappointing story of a promising federal appellate law clerk gone bad," the 9th U.S. Circuit Court of Appeals wrote in its decision (PDF). Gordon worked as a law clerk for a judge prior to joining Cisco, where he rose through the ranks to become the network giant's vice president of business development prior to his dramatic fall from grace. ®