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| 2003
News and Press Releases |
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HEADLINE:
Media Vision Fraud Nets CFO 3 1/2-Year Term
By: Jason Hoppin
The Recorder. April 8, 2002
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EXCERPT: Steven Allan, the former chief financial officer of failed high-tech company Media Vision Technology Inc., was sentenced Friday by Senior U.S. District Judge D. Lowell Jensen to 3 1/2 years in a federal prison. Although the U.S. Probation Department recommended 10 years, and Allan would have been looking at even more under current white-collar crime guidelines, Jensen gave Allan a lesser sentence because of his exemplary record in the community and Jensen's belief that the prosecution's star witness was the key figure behind the fraud. "I've never seen so many letters," Jensen said. "They tell you about a Steven Allan that ought not be in this position. ... It is out of character and it is aberrant in any real sense." Allan was convicted for his role in an early 1990s financial fraud at Fremont, Calif.-based Media Vision. In an effort to drive up its stock price, contracts were backdated and unsold merchandise was concealed on offshore barges. When the scheme was revealed in 1994, the company spiraled into bankruptcy, costing investors many millions of dollars. In court Friday, Allan thanked his family but blamed his pending prison term on Paul Jain, Media Vision's former chief executive officer, who cut a deal with the government in exchange for testimony. "If I hadn't taken the Media Vision job," Allan said, "obviously I wouldn't be here today." Assistant U.S. Attorney John Hemann urged Jensen not to show leniency to Allan and disputed Jensen's contention that Jain was the real culprit. "It was his job, more than any other person at the company, to assure that the information that was reported to the marketplace was not false," Hemann said. Allan's potential sentence for convictions on three counts of wire fraud and two counts of making false statements to investigators was escalated by the loss to investors. The government argued that it could be in excess of $300 million. But Arthur Lemann III, Allan's lawyer, said the decline in company value could be due to bad business decisions as much as financial fraud, and argued that assigning a dollar amount to the fraud would be difficult, if not impossible. There is apparently little case law on the issue.
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