From: William Knowles (wkC4I.ORG)
Date: Sat Apr 07 2001 - 03:41:54 CDT

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http://www0.mercurycenter.com/premium/business/docs/fraud05.htm

BY HOWARD MINTZ
Mercury News
April 5, 2001

A federal grand jury Wednesday indicted two Cisco Systems accountants,
accusing them of breaking into the company's computer system and
illegally transferring millions of dollars in Cisco stock into their
own brokerage accounts, apparently by exploiting weaknesses in the
networking giant's internal security.

Geoffrey Osowski, 30, of Mountain View and Wilson Tang, 35, of Palo
Alto were charged with computer and wire fraud in connection with
allegations they started shifting shares of Cisco stock to themselves
in December, then cashed in on the profits over the next several
months. Osowski, a financial analyst, and Tang, an accounting manager,
admitted the scheme to FBI agents when confronted two weeks ago,
according to an FBI affidavit.

Federal prosecutors contend Osowski and Tang transferred 97,750 Cisco
shares -- worth about $4 million at the time -- in December by
exploiting their positions within the company and detecting defects in
a Cisco computer program called ``Sabrina'' that processed
stock-option distributions. Prosecutors contend Osowski and Tang
forged forms authorizing disbursements of the stock, primarily by
obtaining the computer codes required to make such transactions.

The indictment contends the two accountants in February transferred
more than 100,000 additional shares into separate brokerage accounts,
at the time valued at $2.3 million. Both defendants liquidated much of
their holdings, and Osowski went on a spending spree, buying a $52,000
Mercedes and a $44,000 diamond ring with his profits, according to
court papers.

Cisco officials reported suspicious trading activity to the FBI on
March 27, and FBI agents quickly confronted Osowski and Tang, FBI
affidavits say. Osowski told the FBI he discovered the weakness in the
``Sabrina'' program and enlisted Tang in the scheme.

``We brought it to the attention of law enforcement and fully support
their efforts to prosecute,'' said Cisco spokesman Steve Langdon.
Osowski and Tang have been fired by the company, Langdon said.

A federal magistrate judge in San Jose has released Osowski and Tang
on $100,000 bonds. They are scheduled to be arraigned on the charges
April 12.

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