Shanahan retrial set, but prosecution still not certain

A date has been set to start the retrial in US District Court in Concord of Enterasys Networks’ former chief operating officer.

But it remains to be seen whether the U.S. attorney’s office will actually prosecute Jerry Shanahan, the former executive at the trial, which is scheduled to begin Sept. 5.

Shanahan has been charged with engaging in a conspiracy to inflate revenue when the Rochester-based Cabletron spun off Enterasys in 2001.

Shanahan first faced the charges in December, along with four other former Enterasys officials who were convicted after a month-long trial. The jury could not reach a decision on Shanahan.

In December, Deputy U.S. Attorney William Morse told a federal judge he would reach a decision on whether to prosecute “very soon.” In the meantime, Shanahan was free to go back to his home in Cork, Ireland.

On Tuesday, Morse said that the court set the trial date without any prompting on his part, and he would not comment on whether he would proceed to trial or file a motion to drop the charges.

Shanahan’s attorney could not be reached for comment by deadline. His pretrial hearing has been set for Aug. 27.

In a related development, federal Judge Paul Barbadoro denied motions to dismiss the convictions of Enterasys’ former chief financial officer, Robert Gagalis and Bruce Kay, once vice president of finance. The judge had ruled against a similar dismissal motion against Robert Barber, who was on the Enterasys investment team.

Sentencing for all the three and the fourth convicted defendant, David Boey, former head of sales of the company’s Asia Pacific division, is scheduled for April.

In addition, all five of the defendants, along with five others — including Piyush Patel, the former chief executive officer of Cabletron Systems — face civil charges recently filed by the Securities and Exchange Commission. The civil charges echo the criminal complaint, though it includes a number of particulars, some dating back before Rochester-based Cabletron spun off Enterasys. – BOB SANDERS

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