Sentencing delayed for four ex-Enterasys execs

Sentencing of four former Enterasys Networks executives convicted last year of securities fraud is likely to be delayed until late June.

On Wednesday, prosecutors and defense attorneys jointly appealed to the court to put off sentencing a couple of months so they can file their dueling estimates of how much the fraudulent revenue estimates cost shareholders in the months following the 2001 spinoff of Enterasys from Cabletron Systems.

Federal guidelines on sentencing partly depend on the loss involved.

Enterasys was eventually sold off to private investors at a fraction of the share price at the time of the spinoff. Prosecutors have said that the loss was more than a $1 billion. Defense attorneys contend that it was much less than that.

A federal jury in Concord last December convicted former Robert Gagalis, Bruce Kay, Robert Barber and David Boey the Asia Pacific division after a month-long trial. It did not reach a verdict on most counts against Jerry Shanahan, the former chief operating officer, who is scheduled to be retried in September.

The four convicted defendants were scheduled to be sentenced in mid-April, about the same time the five cooperating witnesses who have already pleaded guilty – including former CEO Henry Fiallo – are to be sentenced.

But the government would not be able to disclose its expert report on the loss involved until April 13. Defense attorneys said they would need a month to respond with their own report, and the first available date for sentencing after that would be between June 27 and 29. The court still has to approve the delay.

Meanwhile, the defendants face a civil complaint filed by the Securities Exchange Commission, along with five other defendants, including Cabletron’s former CEO, Piyush Patel. – BOB SANDERS

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