A former Cisco Systems vice president has been arrested and charged in a San Jose federal court with a multimillion dollar fraud that included phoney stock deals and offshore bank accounts.
The criminal complaint made public on Monday accuses 42-year-old Robert S Gordon of devising a scheme to defraud and obtain money by false and fraudulent means using wires in interstate commerce.
Gordon allegedly transferred 30,026 shares of stock in Internet Security Services Group, which has since been acquired by Cisco, into financial accounts in the name of Cisco Systems Inc in the Bahamas, which had no affiliation with San Jose's Cisco, according to court records.
The accused allegedly took the proceeds from the shares he sold and invested much of it into Spanlink Communications, a company partnered with Cisco. The affidavit alleges that Gordon doubled his investment in Spanlink, receiving $10m on his $5m investment.
The affidavit also stated that Gordon admitted to Cisco officials that he created the company in the Bahamas and transferred the stock without Cisco's permission.
Gordon sent an eight-page letter explaining his actions to Cisco chief executive John Chambers, according to the affidavit, in which he informed Cisco that the stock transfer and Spanlink investment were "part of an effort to help Cisco ecosystem partners in a pinch".
Cisco officials told Gordon to clear his desk on 4 April.
"We brought this situation to the attention of law enforcement authorities. We are assisting their investigation and support their prosecution efforts," Cisco said in a statement.
It is the second time in the past month that Cisco employees have been charged in a federal court in San Jose with trying to steal from the company.
Two Cisco accountants were recently indicted for breaking into the company computer network and transferring millions of dollars in Cisco stock to their own brokerage accounts.
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