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Thursday, Jun 8, 2023

Peregrine Figures Get Prison, Probation

Four more former executives of Peregrine Systems Inc., the San Diego software firm embroiled in a massive accounting scandal which erupted in 2002, received prison sentences and probation in recent court hearings, according to a Dec. 30 report from the U.S. Attorney’s office.

Federal Judge Thomas Whelan sentenced Berdj Joseph Rassam, Peregrine’s former controller, to 24 months on Dec. 30 based on his pleading guilty to one count of securities fraud.

On Dec. 22, Whelan sentenced Andrew Vincent Cahill, Peregrine’s former executive vice president of worldwide sales, to 27 months based on his guilty plea of one count of securities fraud.

Both Rassam and Cahill entered guilty pleas in 2007.

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Whelan also handed down probation sentences of five years to Ilse Cappel, a former assistant treasurer, and John Burnham Benjamin, former treasurer, for their roles in the elaborate fraud that led to Peregrine’s collapse in 2002.

Earlier this month, three other Peregrine executives in the case, including former CEO Stephen Gardner, received prison sentences arising from guilty pleas in the case.

Peregrine, which made software that helps large companies track assets such as computer systems, was among the most successful high-tech firms in San Diego in the 1990s, with sales of more than $500 million and some 4,000 employees.

Prosecutors said that executives concocted a scheme to ensure the firm’s stock continue rising by falsely inflating revenue and earnings figures through a variety of illegal accounting practices. As a result of the fraud, Peregrine’s stock collapsed, shareholders lost a combined $4 billion in equity in the firm, and the company filed for bankruptcy in 2002. In 2006, the company was sold to Hewlett-Packard for $425 million.

John Moores, the majority owner of the San Diego Padres, was Peregrine’s chairman and the company’s largest shareholder when the firm went public in 1997, but resigned in 2000. Moores sold off most of his shares by 2001, taking a profit of more than $600 million.

He was never charged in the case, but was a defendant in many shareholder lawsuits, most of which were dismissed.

, Mike Allen


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