Two senior beancounters at Gateway cooked the books in 2000 in an attempt to keep Wall Street analysts happy. John Todd, the ex-chief financial officer, and Robert Manza, the PC maker's fomer controller, also illegally swept bad news about the company under the carpet.

Yesterday they were found guilty of engaging in a fraudulent revenue and earnings manipulation scheme, after a three week trial in San Diego, Calif. The court heard how Todd masterminded the scheme to "close the gap" between analysts' expectations and Gateway's anticipated revenues through a variety of improper and extraordinary transactions," The Securities and Exchange Commission (SEC) said. First up, Manza a certified public accountant, drew up financial statements, knowing that they failed to comply with generally accepted accounting principles (GAAP).

Compounding the fraud, the duo failed to disclose a big increase in lending to bad risk customers in Q2 and Q3, 2000. According to the SEC, Todd decided to offer pre-approved financing to individuals whose credit applications had been previously rejected by Gateway. Then the credit floodgates opened to even less creditworthy customers in what Gateway insiders called the DDS program. As in deep, deep shit.

Now Todd and Manza are in DDS. Sentencing comes later. ®

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• Gateway ships quad-core desktop into US stores (1 May 2007)
• Gateway up on Acer bid talk (20 March 2007)
• Former Gateway execs deny SEC fraud charges (17 November 2003)
• Gateway hit with shareholder lawsuit (11 December 2000)
• Gateway in PC price war gloom (30 November 2000)