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The former general counsel of now-defunct U.S. Wireless Corporation, David Klarman, has pleaded guilty to mail fraud and money laundering for his role in a scheme that was blamed for the company’s demise, according to the U.S. attorney’s office. Klarman entered his plea December 2 as part of a deal with federal prosecutors, but the agreement was sealed for more than a month. His attorney, Edward Swanson of San Francisco’s Swanson & McNamara, did not comment on the plea agreement. Klarman’s alleged partner in the massive embezzlement scheme, former U.S. Wireless chief executive officer Oliver Hilsenrath, is also under indictment. San Francisco prosecutors are trying to have him extradited from Israel. U.S. Wireless was based in San Ramon, California. Klarman was arrested at his East Hampton, New York, home in July ["Another GC, Another Charge," September 2003]. He pleaded guilty to one count each of money laundering and mail fraud, and admitted to embezzling more than 500,000 shares of U.S. Wireless stock and laundering more than $9 million. In 2003 Klarman and Hilsenrath were accused of hiding the stolen money and stock in offshore shell corporations. Hilsenrath was also accused of making false statements in annual financial reports. U.S. Wireless went bankrupt after the fraud was revealed. Klarman faces 20 years in jail plus a $500,000 fine just for the money laundering. He agreed to place $5 million in an escrow account while he awaits sentencing.

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