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Just a few years ago, Bruce Hill was the general counsel of a small Boston-based software company. But in January he became inmate 252-16-036 at a federal prison in New York, where he’s serving a one-year-and-a-day sentence for lying to the Securities and Exchange Commission. Among company lawyers who’ve been indicted in recent years, Hill appears to be only the third to go to jail. The former chief legal officer of Inso Corporation, Hill was indicted on nine counts, including securities and wire fraud ["Tangled Web," July 2004]. Last summer a jury deadlocked on the more serious allegations and convicted Hill on a single perjury charge. After his January sentencing, Hill checked in at the Metropolitan Detention Center in Brooklyn. The second-largest federal prison, the MDC houses 2,900 inmates, including some of the most dangerous and violent offenders in the federal penal system. At his sentencing, Hill was also ordered to pay a $75,000 fine and to perform community service after his release. “The case is now resolved,” says a spokeswoman for the U.S. attorney’s office in Boston, adding that the government will not seek to retry Hill on the fraud charges. Prosecutors declined further comment, although at the time of the jury verdict, U.S. Attorney Michael Sullivan described Hill’s behavior as “not only inappropriate conduct for an attorney and corporate officer, it was a crime.” Hill’s lawyer, Boston solo practitioner Richard Egbert, did not return calls for comment. A former M&A associate at Skadden, Arps, Slate, Meagher & Flom, Hill joined Inso as GC in 1994. His troubles stemmed from a sham transaction that he allegedly concocted with former Inso vice president Graham Marshall. The deal, in which a Malaysian distributor placed a fake order for $3 million worth of Inso software, was devised so that Inso could meet its revenue targets for the third quarter of 1998. Inso assumed that another customer would buy the software before the year’s end, allowing it to keep the revenue on its books. But after that deal fell through, Inso was forced to restate its 1998 earnings. Its stock price tanked, and the company went out of business in 2001. The perjury charge against Hill arose from his testimony to the SEC. Hill told the agency’s investigators that he didn’t know anything about a certificate for letters of credit that Inso extended to the Malaysian distributor to finance its supposed purchase. At trial, however, prosecutors presented evidence that Hill had personally directed the preparation of the certificate and approved its signing. After leaving Inso in 2000, Hill went on to become a general partner at Divestiture Growth Capital, a New York � based private investment firm. Calls to the company were not returned. Besides Hill, only two other in-house lawyers appear to have ended up in prison in recent years. Franklin Brown, the former GC of Rite Aid Corporation, was convicted in 2003 on several counts of fraud and obstruction of justice. Brown was sentenced to ten years, which he’s serving at a medium-security prison in rural Pennsylvania. Andrew Marks, the former chief patent counsel of Vertex Pharmaceuticals Incorporated, served a one-year sentence after pleading guilty to insider trading in 2003. Hill, 42, is the only Inso executive to go to jail. Marshall fled to his native England after being indicted. According to the Stamford Mercury newspaper, Marshall, 58, hung himself last November after he was ordered to return to the United States. Coroner Gordon Ryall, who conducted the inquest into Marshall’s death, said in an interview with Corporate Counsel that Marshall’s apparent motive was to spare his family the shame of a court ordeal. The government targeted two other Inso executives in its probe. Former CEO Steven Paxhia settled with the SEC for $101,000 without admitting or denying wrongdoing. Ex � VP Richard Vatcher pled guilty to securities fraud in a separate scheme. After one year of home detention, he is now serving two years of probation.

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