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Original Felony Story
October 5, 2006. "We plan to aggressively prosecute this case" said California's attorney general Bill Lockyer. On October 4, 2006, his office filed four felony (criminal) charges against former Hewlett Packard (HP) chairperson Patricia Dunn, Kevin T. Hunsaker, a former senior HP employee, and three private investigators involved in HP's leak investigation scandal (see Scandal in the Boardroom).
Dunn initiated the investigation and Hunsaker was the head of the investigation team. The four charges are: Using false pretences to obtain confidential information from a public utility (the telephone records of twelve people including journalists, HP board members and HP employees), unauthorized access of computer data, identity theft and conspiracy.
The three private investigators are Ronald DeLia, managing director of Security Outsourcing Solutions Inc., a Boston-based HP security contractor; Matthew Depante, manager of Action Research Group, a Melbourne, Florida based company described as an information broker, and Bryan C. Wagner* (see update above), a Littleton, Colorado based employee of Action Research Group. It is possible that the California AG's office might try and strike a deal with these three in order to get testimony that might incriminate Dunn and Hunsaker.
While Lockyer said that, "There currently is no evidence that Mark Hurd (current HP Chairman and CEO) engaged in criminal conduct," he nevertheless criticized HP, saying the company had lost its way - referring perhaps to the corporate policies of HP's founders, Bill Hewlett and David Packard called the "HP Way". He also said, "However, the investigation into this matter remains active and (is) still incomplete." Further charges are a possibility.
The day after the charges were filed against her, Dunn surrendered in Santa Clara County Superior Court in San Jose. Palo Alto, where HP is based, is in Santa Clara County. She was booked and released without bail. Superior Court Judge Alfonso Fernandez ordered Dunn to return to court for arraignment on November 17 and enter a plea to the charges.
Both Dunn and her attorney have stated that Dunn is innocent of the charges.
Dunn's attorney, Jim Brosnahan of Morrison and Foerster LLP, San Francisco, said "These charges are being brought against the wrong person at the wrong time and for the wrong reasons. They are the culmination of a well-financed and highly orchestrated disinformation campaign,"; said Dunn's attorney.
Dunn has also said that she is innocent. During an interview for October 8's, 60 Minutes program on CBS, Dunn told interviewer Lesley Stahl that she is innocent of all the charges. "Every company has investigations. Investigations, by their nature, are intrusive. If you think that Hewlett-Packard is the only company that has an investigations force - which by the way, is peopled mostly with former law enforcement officers that do all kinds of private detective work, monitoring, posing as other people in order to solve problems to protect shareholder value -- you're being naïve."
Investigator Wagner Pleads Guilty
January 30, 2007. On January 12, 2007, Bryan C. Wagner, 29, a private investigator with Action Research Group, and one of five individuals (see below) against whom felony charges were brought by California's attorney general, pleaded guilty in federal court to using fraud and deceit in order to obtain personal phone records of journalists and certain Hewlett Packard board directors.
On January 29, 2007, Judge Jerome Nadler of the Santa Clara County Superior Court in San Jose, California agreed to dismiss similar charges brought forward by the state of California. Wagner's attorneys had asked the California judge to dismiss the charges against his client. State law in California states that a defendant can't be tried if he or she has already been tried for the same crime by another state or the federal government. Nathan Barankin, a spokesman for Attorney General Jerry Brown, announced that "our office agrees with Wagner's argument and will concede that our prosecution against Wagner must be dismissed"
In an apparent plea bargain, Bryan C. Wagner, 29, a private investigator with Action Research Group admitted at a federal court hearing that he "used fraud and deceit" to obtain personal phone records of journalists and certain Hewlett Packard board directors. The U.S. attorney's office said that "Wagner admitted today that he was paid as part of a conspiracy" and that he "made fraudulent use of social security numbers and other confidential information." Wagner pretended to be a journalist in order to obtain the private records. While the federal government's documents filed in court do not name what it refers to as Wagner's "co-conspirators," it stated that Wagner established a fraudulent online account to access an unnamed reporter's phone records using a Social Security number he obtained from one of the co-conspirators. He then turned over the records to the co-conspirators. Without a plea bargain agreement, the maximum sentence that Wagner could receive is a five-year prison term and/or a $250,000 fine.
The federal government had held back filing charges against Wagner until January 10, 2007. While Wagner is the only one charged by the federal government so far, Kevin Ryan, U.S. attorney for the Northern District of California, said late last year, that his office was considering federal charges against the other four.
On its part, the state appears to be backing away from pursuing the charges against the other four individuals charged a chance to plead guilt to a misdemeanour. Under the plea agreement, a judge would decide any sentence. In California, a misdemeanour can result in a jail sentence of up to two years. CNET reports that the state has come under pressure from federal authorities to drop the felony charges, pressure that has resulted in the State's plea proposal.
On January 20, 2007, CNN quoting a "source with knowledge of the case" reported that the four others charged with felony are not expected to accept the plea deal and in former chairperson, Patricia Dunn's case, "at least until there's something more concrete from the federal government." CNN also reported that Hunsaker's attorney, Michael Pancer, saying that his client is not "involved in any plea negotiations with the state because Kevin hasn't broken any laws and we see no need for a plea bargain."
Barring some agreement to the contrary, the next court appearance for the four others still charged by California - Dunn, Hunsaker, DeLia and DePante - is scheduled for February 28, 2007.
Criminal Charge Against Hewlett Packard's Former Chairwoman Dropped
March 15, 2007. On March 14, 2007, California State Judge dismissed the criminal charges against Hewlett Packard's Former Chairwoman Patricia Dunn. The State Attorney General's office had earlier said this was part of a plea deal where Dunn would agree to plead guilty to a reduced charge and Dunn would not be required to do community service because of her health. The AG's office later admitted this was an error and there was no plea deal with Dunn. However, the State Attorney General's office added that the court dismissed Dunn's charge, on the recommendation of the AG's office, because of her ongoing battle with ovarian cancer and not because she's innocent.
The three other defendants in the HP investigation scandal - former HP ethics chief Kevin Hunsaker, former HP ethics chief Kevin Hunsaker, and private investigators Ronald DeLia and Matthew DePante private investigators Ronald DeLia and Matthew DePante - pleaded "no contest" to a lesser wire fraud charge, which is not a criminal offence but a misdemeanour in California. The Court did not accept the plea but offered to dismiss charges if by September 12, 2007, they serve 96 hours of community service, and complete any court-filed restitution requests made by victims.
According to the Attorney General's office, Dunn's arrest will remain on her record.
Federal prosecutors have said their investigation of the HP leaks probe is still ongoing though they have not filed any charges as yet. California's Attorney General's office said in its statement that, "The guilty pleas offered today will not prevent federal prosecutors from filing criminal charges against Hunsaker, DeLia or DePante -- if they so choose."