Cisco exec pleads guilty to $50m fraud

Disgraced former Cisco Systems executive Robert Gordon has pleaded guilty to fraud and insider dealing charges.

Gordon, 43, a former vice president and director of business development at Cisco, has admitted conducting an elaborate scam which involved diverting $50 million of Cisco-owned stock through overseas accounts he controlled.

After an internal investigation, Cisco fired him in April 2001, and a month later he was indicted by a Grand Jury accused of stealing $20 million from Cisco. Gordon initially denied all the charges against him.

Last April, he went on the run for a month after missing a court hearing.

Hunted by the FBI (who issued a warrant for his arrest), Gordon was eventually arrested at Santa Barbara hospital after a failed suicide attempt. He was transferred to a psychiatric unit at a Mountain View hospital, where he remains under federal custody.

Yesterday Gordon appeared before US District Judge Jeremy Fogel in San Jose, where he pleaded guilty to two counts of wire fraud, and one charge of using inside information to make an illicit profit from stock deals.

Gordon has paid Cisco $18 million and around $7 million in fines and restitution to the US government.

A sentencing hearing is scheduled for October 29, where he expected to receive a sentence of between five and nine years in jail, after a plea-bargaining arrangement between defence attorneys and prosecutors. ®

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