The former president and chief executive of Vari-L Co., the now-defunct Denver maker of telecommunications equipment, pleaded guilty Thursday to charges of wire fraud and securities fraud.
David Glen Sherman, 60, of Foothill Ranch, Calif., entered his plea before U.S. District Court Judge Robert E. Blackburn.
Prosecutors alleged that Sherman defrauded regulators and investors by manipulating Vari-L’s quarterly and annual financial results between 1994 and 2000.
Sherman allegedly made Vari-L employees record revenue on products that had not yet been shipped, or in some cases were not completed. He allegedly told them to falsify sales orders and book the revenue. Sherman also allegedly had employees hold Vari-L’s books open for several weeks after a quarter’s end to claim revenue from the subsequent quarter.
Sherman is scheduled to be sentenced Nov. 4. He faces up to 10 years in federal prison and a $2 million fine.
The company’s chairman, Joseph Harold Kiser, was indicted last month by a federal grand jury in Denver on related charges. Former chief financial officer Jon Clark and former controller Sara Hume both have pleaded guilty to related charges and are awaiting sentencing.
Plagued by federal investigations and the telecom shakeout, Vari-L was purchased in 2003 by Sirenza Microdevices for $15 million.
The Vari-L case was investigated by the U.S. Postal Inspection Service, the Federal Bureau of Investigation and the Securities and Exchange Commission. It is being prosecuted by Assistant U.S. Attorneys Patricia Davies and Bob Mydans.
Staff writer Greg Griffin can be reached at 303-820-1241 or ggriffin@denverpost.com.
