The United States Attorney for the District of Colorado announced that on March 11, 2004, David G. Sherman was indicted by a federal grand jury on charges of securities fraud, wire fraud, false statements in reports to the Securities and Exchange Commission, false statements to auditors and keeping false books and records. Sherman, now a resident of Foothill Ranch, California, is the former CFO and CEO of the now defunct Vari-L Company, Inc. The thirteen-count indictment was filed in the U.S. District Court for the District of Colorado.
On September 27, 2001, the Commission filed a civil complaint against Sherman in the U.S. District Court for the District of Colorado, alleging that Sherman, other Vari-L employees, and Vari-L engaged in a massive financial reporting fraud designed to show consistently increasing revenue and earnings, instead of losses, from 1996 through the quarter ended March 31, 2000 by recognizing false revenue, improperly capitalizing and depreciating costs, overstating inventory, and improperly deferring period costs. On September 26, 2003, the U.S. District Court entered a final judgment of permanent injunction against Sherman pursuant to his consent.
For more information, see Litigation Release Nos. 18598 (February 27, 2004), 17671 (August 9, 2002) and 17155 (September 27, 2001).