By Larry Rulison, BBJ Staff

Former Network Technologies Group Inc. CEO Michele Tobin and three others were indicted Wednesday on federal charges of defrauding Mercantile-Safe Deposit & Trust Co., the Abell Foundation and a Connecticut investment company.

Tobin, Victor Giordani Jr., the former chief operating officer, Thomas Bray, the former chief financial officer, and Beverly Baker, the defunct company's former controller were charged by a grand jury with intentionally falsifying the company's financial statements to the tune of $2 million. Federal prosecutors say the NTG execs used false statements to get $1.75 million in investments from the Abell Foundation and the Smith Whiley Co. of Connecticut and a loan from Mercantile.

The Fells Point telecommunications firm collapsed last July amid allegations of the alleged accounting fraud, which the Baltimore Business Journal first reported July 12.

Tobin, Bray, Baker and Giordani each face four counts of wire fraud, one count of mail fraud and five counts of bank fraud. Each faces 30 years in prison and a $1 million fine for each count on the indictment if convicted.

The NTG case shocked Baltimore's business community in July when the company's Interim CEO John M. Collard said the company was shutting down and laying off all 125 workers after uncovering accounting irregularities. NTG had high-profile clients, including Comcast, Baltimore Gas & Electric, AT&T and WorldCom, and it has attracted millions from the local venture capital community.

Collard was hired by the company's board of directors after the company's original CEO, Michele A. Tobin, left the firm in late June for personal reasons. Tobin subsequently sold her Baltimore County home and moved to Colorado. NTG's lead secured creditor, Mercantile, went after Tobin for more than $3.5 million in loans NTG never repaid the bank, and Tobin filed for Chapter 7 personal bankruptcy in December. Some of NTG's senior officers, including Giordani, also claimed that their signatures had been forged onto some of the loan documents.

Federal law enforcement authorities have been investigating the alleged fraud since the company closed last summer.

U.S. Attorney Thomas M. DiBiagio said that all four of the defendants worked in concert on the scheme. ?They were all in it together,? DiBiagio said. However, he wouldn?t say whether any of the defendants had been cooperative with federal investigators in the case.

He said all four, including Tobin, are expected to surrender voluntarily to federal authorities in Baltimore the next two weeks to be arraigned on the charges. DiBiagio also said that NTG?s former auditing firm, Ellin & Tucker Chartered, cooperated in the investigation. ?There is a tremendous amount of corruption out there,? DiBiagio said. ?There?s a real consequence for corporate fraud here in Maryland.? Baltimore's Abell Venture Fund and Smith Whiley & Co. of Hartford, Conn., invested a total of $1.7 million in the company last March. The Abell Venture Fund also invested $1.5 million in NTG in 1999, and Spring Capital Partners LP, a Baltimore venture firm, invested $3.5 million in 2000.

All three companies lost their investments after the company's collapse, and Mercantile only recouped roughly $1 million after Collard sold NTG's assets at auction in August.

Other Versions

Sections     Index

We welcome constructive inquires. More information is available if required.

There is more to Strategic Management Partner's Return to Home Page

  Contact Information

Index

John M. Collard, Chairman
Strategic Management Partners, Inc.
522 Horn Point Drive
Annapolis, Maryland [MD] 21403
Voice 410-263-9100 Facsimile 410-263-6094 E-Mail Strategist@aol.com.

We serve as experts for comment or quote, please contact us at 410-263-9100

We welcome constructive inquires, please send via E-Mail to:   Strategist.

Top   Index   Story   Sections   Contact SMP Library www.StrategicMgtPartners.com www.StrategistLibrary.com www.StrategistArticle.com www.StrategistFeature.com

Copyright © 2002-2003 Strategic Management Partners, Inc.