The United States Attorney's
Office for the Northern District of California announced that former
Cisco Systems, Inc., accountants Geoffrey Osowski and Wilson Tang pled
guilty today to exceeding their authorized access to the computer systems
of Cisco Systems in order to illegally issue almost $8 million in Cisco
stock to themselves.
Mr. Osowski, age 30, a resident of Mountain View at the time the charges
were brought, and Mr. Tang, age 35, a resident of Palo Alto at the time
the charges were brought, were indicted by a federal Grand Jury on April
4, 2001. The two were charged with one count of conspiracy to commit
computer and wire fraud in violation of Title 18, United States Code,
Section 371, one count of computer fraud in violation of Title 18, United
States Code, Section 1030(a)(4), and three counts of wire fraud in violation
of Title 18, United States Code, Section 1343.
Under the plea agreement, Mr. Osowski and Mr. Tang each pled guilty to
one count of computer fraud in violation of Title 18, United States Code,
Section 1030(a)(4), agreed to the forfeiture of assets that the government
had seized from the defendants (including stock already liquidated for
$5,049,057, jewelry and an automobile), and agreed to pay restitution
in the amount of the difference between $7,868,637 and the amount that
the government will recover from the sale of the seized items.
In pleading guilty, Mr. Osowski and Mr. Tang admitted that between October
2000 and March 27, 2001, they participated together in a scheme to defraud
Cisco Systems in order to obtain Cisco stock that they were not authorized
to obtain. As part of the scheme, they exceeded their authorized
access to computer systems at Cisco in order to access a computer system
used by the company to manage stock option disbursals, used that access
to identify control numbers to track authorized stock option disbursals,
created forged forms purporting to authorize disbursals of stock, faxed
the forged requests to the company responsible for controlling and issuing
shares of Cisco Systems stock, and directed that stock be placed in their
personal brokerage accounts.
The two defendants admitted that the first time that they did this, in
December 2000, they caused 97,750 shares of Cisco stock to be placed in
two separate Merrill Lynch accounts, with 58,250 of the shares deposited
in an account set up by Mr. Osowski and 39,500 shares deposited in an
account set up by Mr. Tang. In February 2001, they caused two additional
transfers of stock, in amounts of 67,500 shares and 65,300 shares, to
be transferred to brokerage accounts in their names. The total value
of the Cisco stock that they took on these three occasions (at the time
that they transferred the stock) was approximately $7,868,637.
The sentencing of Mr. Osowski and Mr. Tang is scheduled for November 26,
2001 at 9 am before Judge Ronald M. Whyte in San Jose in federal court.
The maximum statutory penalty for each count in violation of Title 18,
United States Code, Section 1030(a)(4) is five years imprisonment and
a fine of $250,000, plus restitution if appropriate. However, the
actual sentence will be dictated by the Federal Sentencing Guidelines,
which take into account a number of factors, and will be imposed in the
discretion of the Court.
The prosecution is the result of an investigation by agents of the Federal
Bureau of Investigation. Joseph E. Sullivan is the Assistant U.S.
Attorney who prosecuted the case with the assistance of Lauri Gomez.
A copy of this press release and key court documents filed in the case
may also be found on the U.S. Attorney's Office's website at: www.usdoj.gov/usao/can/
All press inquiries to the U.S. Attorney's Office should be directed to
Assistant U.S. Attorney Matthew J. Jacobs at (415)436-7181 or to Assistant
U.S. Attorney Elizabeth de la Vega at (408) 535-5032.
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