A federal appeals court vindicated former McAfee Inc. chief financial officer Prabhat Goyal late last week. Goyal was convicted of several white collar crimes, including securities fraud. However, the 9th Circuit Court of Appeals overturned these convictions, finding no proof that Goyal engaged in any illegal activity during his time at McAfee.
Goyal served as CFO of the security software company from late 1997, when McAfee was known as Network Associates, and resigned in 2001. Three years after his resignation, he was accused of lying to auditors and misstating revenue. Prosecutors said he used illegal accounting procedures to cover up $330 million in losses. The jury was asked to interpret complex accounting rules in making its decision. The jury chose to convict Goyal in 2007, resulting in a prison sentence of one year and one day.
However, the federal appeals court, in an opinion written by Judge Richard Clifton, found that prosecutors had failed to prove that any of Goyal’s actions were illegal. The panel found that, no matter how the evidence was viewed, “no reasonable juror could have found Goyal guilty beyond a reasonable doubt of any of the charges against him.”
Further, Chief Judge Alex Kozinski offered harsh criticism of the federal prosecutors in the case in a concurring opinion. Kozinski said the case served as an example of a recent trend in which federal prosecutors attempt “to stretch criminal law beyond its proper bounds.” Based on the evidence, federal prosecutors never should have pursued the case against Goyal, according to Kozinski.
Source: ABC News, “Appeals Court Reverses McAfee CFO’s Conviction,” Paul Elias, December 10, 2010