More Fallout From the Last Bubble

Even as Congress was moving to clean up after the mortgage-securitization bubble, another branch of the federal government on the other side of the country was still dealing with the tech and telecom bubble.

A federal judge sentenced Prabhat Goyal, the C.F.O. of McAfee, yesterday to a prison term of a year and one day for participating in accounting fraud.

Goyal's lawyer, a partner at Wilmer Cutler Pickering Hale & Dorr, had asked for a year of home confinement, while the assistant U.S. attorney requested 46 months of jail time. Instead, District Judge Susan Illston took the probation office's recommendation of a jail time. She also ordered Goyal to pay a $200,000 fine.

The San Francisco Chronicle reports that the extra day in his sentence would make Goyal eligible for sentence reduction, by as much as a few weeks, based on good behavior.

Goyal was convicted last year on 15 counts of accounting- and securities-related fraud, including inflating the revenue and earnings from 1998 to 2000 and committing insider trading. McAfee eventually acquired the company, which was called Network Associates.

Two other employees have already been convicted for the same scheme: Terry Davis and Evan Collins, both of whom were put on probation, a lighter sentence because they had both pleaded guilty, reports Law.com.

McAfee's former general counsel, Kent Roberts, is also facing charges, but for backdating stock options, a case that's part of a larger government investigation.

by Jennifer Lai

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