NTG CEO: Law enforcement involved John M. Collard, Chairman, Strategic Management Partners, Inc. was interim CEO for Network Technologies Group, Inc.
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John M. Collard, Chairman, Strategic Management Partners, Inc. was interim CEO for Network Technologies Group, Inc.
NTG CEO: Law enforcement involved        Text
by Larry Rulison

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July 23, 2002 

NTG CEO: Law enforcement involved

Larry Rulison   Staff

State and federal law enforcement authorities are looking into alleged accounting irregularities at Network Technologies Group Inc., the company's interim chief executive said Tuesday.

Interim CEO John M. Collard told the Business Journal that three separate agencies, including one on the federal level, are investigating the alleged bookkeeping problems that Collard claims led to the company's demise.

Collard, who was installed as interim CEO on July 1, had to lay off all 125 workers at the Fells Point telecommunications firm July 12 after uncovering what he believed were accounting irregularities that he claims may have been criminal.

"There are three investigations going on," Collard said. "At the moment, there is a subpoena issued for all the records. Almost everything has been surrendered already. They're proceeding ahead as they see appropriate."

Collard would not specify the agencies by name for fear of compromising the investigations.

Baltimore City State's Attorney's Office spokesperson Alex Miller said that her agency was not involved in the investigation. A spokesman for the Attorney General was not immediately available for comment.

Officials from the office of U.S. Attorney Thomas M. DiBiagio could not be reached either. But last week, spokesperson Virginia B. Evans said she could neither confirm or deny that an investigation was taking place.

In light of a string of corporate fraud scandals recently, DiBiagio has said that he intends to make prosecuting white collar crime a priority.

"Individuals who commit financial crimes in this District will be treated like every other criminal prosecuted by federal prosecutors in Maryland," DiBiagio said in a July 14 statement. "They will be arrested, indicted and prosecuted."

Collard has maintained that shortly after arriving at the company as a turnaround specialist he uncovered what he believed were falsified invoices for receivables from Comcast Corp., one of NTG's major clients.

Collard claims that the alleged phony invoices were used to inflate the assets of the company so that it would continue to qualify for financing from Mercantile-Safe Deposits & Trust Co., its major lender.

When the bank was informed of the alleged accounting problems, the bank recalled NTG's loan, Collard said. Shut off from funds, the company couldn't meet payroll, Collard said. All 125 employees were laid off as a result. The company is currently in the process of liquidating its assets so that Mercantile can get paid an estimated $1 million it is owed, Collard said.

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