Frances M. Flood and Susie Strohm, former executive officers of ClearOne Communications, guilty of all counts charged in the indictment (conspiracy, making false statements to an accountant, securities fraud and perjury). Ms. Strohm was convicted of one count of perjury and acquitted on all other charges in the indictment. The trial started Feb. 2. Sentencing is set for May 7 at 2 p.m.
At the time of the conduct alleged in the indictment (2001-2002), Flood was the chief executive officer and president of ClearOne Communications, Inc. Strohm held the position of chief financial officer. She also was controller and vice president of finance. The trial concerned the specific conduct of the two defendants. ClearOne Communications, Inc., was not charged in the indictment.According to the indictment, in 2001, ClearOne started selling products to distributors in order to recognize revenue at the time of shipment. In order to get distributors to take large amounts of products at the end of quarters or fiscal years, ClearOne made secret promises to distributors that the distributors would pay for the inventory when it was sold rather than under contract terms. The defendants lied to ClearOne's auditors about those promises. Ms. Flood faces up to 5 years in prison for a conviction on conspiracy count; up to 20 years per count for three counts of making false statements to an accountant; up to 20 years per count for two convictions on securities fraud counts; and up to 5 years for perjury. Ms. Strohm faces up to 5 years in prison for the perjury conviction. We are very pleased with the verdict. We believed all along there was criminal conduct involved as set forth in the indictment. The jury sorted through a lot of evidence on different issues and arrived at a verdict that confirmed there was criminal conduct at ClearOne Communications during 2001 and 2002. We appreciate their service in this case
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