U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18598 / February 27, 2004
Accounting and Auditing Enforcement
Release No. 1965 / February 27, 2004
United States of America v. Jon Clark and Sarah Hume, Case Nos. 04-CR-88 and 04-CR-88 (United States District Court for the District of Colorado)
FORMER CFO AND FORMER CONTROLLER OF VARI-L CORP. CRIMINALLY CHARGED WITH FALSIFYING INFORMATION TO INFLATE THE COMPANY'S REVENUE.
The United States Attorney for the District of Colorado announced that on February 26, 2004, Jon Clark, the former CFO of the now defunct Vari-L Company, Inc. and Sarah Hume, the former controller of the company, were criminally charged with falsifying information to inflate the company's revenue. Clark was charged in a one-count information with making a false statement in a report filed with the Securities and Exchange Commission. Hume was charged with one count of falsifying corporate books and records. The separate criminal informations were filed in the U.S. District Court for the District of Colorado.
On September 27, 2001, the Commission filed a civil complaint against Clark, Hume and others in the U.S. District Court for the District of Colorado on, alleged that they 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 October 8, 2001 and August 9, 2002,respectively, the U.S. District Court entered final judgments of permanent injunction, pursuant to the defendants' consents, against Clark and Hume.
For more information, see Litigation Release Nos. 17671 (August 9, 2002) and 17155 (September 27, 2001).