Ex-CEO of Enterasys Pleads Guilty

Accounting fraud cost the networking company at least $20 million, according to prosecutors.

Enrique “Henry” Fiallo, the former chief executive officer of Enterasys Networks, has pleaded guilty to a federal charge of conspiracy to commit securities, mail, and wire fraud, the Associated Press reported.

According to prosecutors cited by the AP, Fiallo participated in accounting fraud that was designed to inflate the company’s revenues to meet Wall Street projections but that eventually cost the networking company at least $20 million.

Fiallo made his guilty plea in U.S. District Court in Concord, New Hampshire. Enterasys, now headquartered in Andover, Massachusetts, was based in Rochester, New Hampshire at the time of the fraud. Fiallo is scheduled to be sentenced on December 17; he could receive up to five years in prison and a $250,000 fine.

In August, former Enterasys vice president Gail Spence Luacaw pleaded guilty to conspiracy to commit securities fraud; in May, ex-assistant controller Anthony Hurley and onetime executive Gary Workman pleaded guilty to wire fraud. Former Enterasys chief financial officer Robert Gagalis and former senior vice president for finance Bruce Kay have pleaded not guilty to federal charges and face trial in October.

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