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Federal prosecutors indicted the ex-GC of Symbol Technologies, Inc., in June for his role in an alleged tax dodge designed to benefit the company’s executives. The government claims that Leonard Goldner altered records showing when his colleagues exercised their stock options so they could lower their tax bills. In a sprawling 25-count indictment, prosecutors also charged seven other former Symbol executives � but not Goldner � for their involvement in a fraudulent earnings overstatement at the company. The case is being brought by the office of U.S. Attorney Roslynn Mauskopf in Brooklyn, which has been working with the Securities and Exchange Commission and other federal investigators. The indictment was filed in June in Brooklyn federal district court. Based in Holtsville, New York, Symbol is a leading producer of bar code scanning devices. Last year it had revenue of more than $1.5 billion. The government hit Goldner with nine counts of mail and wire fraud and tax-related charges for his alleged manipulation of Symbol’s stock option plan. The ex�GC’s aim, the government says, was to help himself and other executives evade tax payments and profit at the company’s expense. A person who exercises an option must pay taxes on the difference between the share price when the option was issued, and when it was exercised. Goldner was responsible for authorizing the exercise of options by Symbol executives. Prosecutors claim that on documents showing when the options were exercised, the ex�GC allowed his colleagues to select dates on which Symbol’s share price was lower than the dates on which they actually exercised their options. The date-fixing allowed Goldner to personally reduce his reported income for 2002 by $150,000, according to prosecutors. Besides potential fines and imprisonment, the government is demanding that Goldner forfeit millions of dollars in assets, including 153,000 shares, options, and warrants. At press time Symbol’s stock price stood at $14.43. Goldner is represented by Andrew Geist, a partner in the New York office of O’Melveny & Myers who is a former SEC enforcement official. Geist did not respond to repeated requests for comment. A cum laude graduate of Harvard Law School, Goldner became Symbol’s GC in 1990. He had previously advised Symbol on corporate and securities matters for nearly a decade as a partner at New York’s Shereff, Friedman, Hoffman and Goodman. His former firm merged with Washington, D.C.’s Swidler & Berlin in 1998 to form Swidler Berlin Shereff Friedman. Goldner prospered at Symbol. According to Corporate Counsel‘s 2001 GC Compensation Survey, he ranked number nine in the nation for take-home pay, largely because of a $9.3 million gain from options exercised in 2000. As Symbol’s legal chief, Goldner led the company through a thicket of patent litigation, culminating in a battle over patent claims by deceased inventor Jerome Lemelson. The long-running litigation ended this past January with a spectacular victory for Symbol ["Breaking the (Bar) Code," May], but cost the company at least $10 million in legal fees, according to news reports. The government’s June indictment had one piece of good news for Goldner � he wasn’t charged with securities or accounting fraud. But seven other former executives, including Symbol’s ex-CEO, weren’t so lucky. According to the government, they manipulated financial statements in order to meet Wall Street’s earnings expectations. As a result, Symbol allegedly overstated its pretax earnings from 1998 to 2003 by $530 million. Prosecutors began looking into the company after receiving an anonymous tip in 2001, U.S. Attorney Mauskopf says. She adds that five other former executives have already pled guilty to accounting fraud. In addition to the government’s criminal indictment, the SEC has brought a civil action against Symbol and several officials for securities fraud. Goldner is named in the agency’s complaint, according to assistant regional director George Stepaniuk. In June, Symbol settled the SEC charges against it for $37 million, and a shareholders’ class action for $102 million. The company also agreed to implement measures to reform its internal accounting methods. Mauskopf adds that the government will designate a corporate monitor to oversee Symbol’s financial reporting.

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