Atherton man indicted on accounting fraud charges Atherton man indicted on accounting fraud charges (November 27, 2002)

By Andrea Gemmet

Almanac Staff Writer

Phillip White, an Atherton resident and former chief executive officer of a Menlo Park software company, was indicted by a federal grand jury in San Francisco November 21 on charges of carrying out a financial accounting fraud.

Mr. White, 60, was CEO of Informix Corp. until 1997, when the company's board of directors forced him to resign after discovering he had concealed two side agreements with Informix customers, according to the indictment.

The side agreements meant that several million dollars that had been recorded as company revenue in 1996 were not in fact paid and should not have been considered revenue, according to the indictment. When this was discovered, the company was forced to restate its financial results for 1996, causing Informix stock to fall from a high of $12.20 per share to a low of $6.25 per share, the indictment said.

Mr. White's attorney said that Informix employees in Japan and Germany entered into improper side agreements with customers Fujitsu and Hewlett-Packard without Mr. White's knowledge.

"Phil White acted properly and responsibly as CEO of Informix," said Elliot R. Peters of San Francisco law firm Keker & Van Nest. "Mr. White did not trade in Informix stock or otherwise gain from his well-intentioned actions while trying to solve these problems for the company in 1997."

Mr. White was indicted on eight counts: securities fraud; making a false statement to accountants; making a false statement in a stock registration document; two counts of falsifying accounting records; and three counts of wire fraud.

Securities fraud violations carry a maximum sentence of 10 years' imprisonment and a $1 million fine. The maximum penalties for wire and mail fraud are five years' imprisonment and a $250,000 fine.

Mr. White is the owner of the historic Jelich Ranch property in Portola Valley, which he bought with his wife Cindie in 2000. He is also the principal investor in the Avenir Restaurant Group, which operates six local restaurants, including Nola in Palo Alto, A Tavola in San Carlos and Milagros and D'asaro Trattoria in Redwood City.

He is scheduled to be arraigned before a federal magistrate in San Francisco on November 26. The U.S. Securities and Exchange Commission filed a separate civil lawsuit against Mr. White in U.S. District Court in San Francisco November 22.

"This and other recent indictments should emphasize to the investing public and officers of public companies that intentional manipulation of a company's financial performance will result in criminal as well as civil prosecution," said U.S. Attorney Kevin Ryan.

Bay City News Service contributed to this report.