Trio of Nortel execs on trial for fraud

Three former executives of Nortel went on trial today, in what could turn out to be one of the biggest white-collar crime cases in Canadian history.

At one time they ran the company that dominated the Canadian telecom industry and the Canadian stock market. Now they’re facing criminal charges that could mean a maximum of 14 years in jail if they’re convicted.

Former Nortel CEO Frank Dunn managed to avoid the cameras, except for a shot through his SUV window. He’s charged with fraud along with Nortel’s former Chief Financial Officer, Douglas Beatty, and the former controller, Michael Gollogly.

They’re accused of manipulating the books at Nortel in 2003 to trigger five million-dollars in bonuses for themselves.

All three are accountants, and Crown prosecutor Robert Hubbard they carried out deliberate manipulations to falsify Nortel’s financial reports. At one time, he says the three claimed they were cleaning up the balance sheet when he says they were in fact continuing the fraud.

Nortel eventually went into bankruptcy and was broken up. Its shares went from $124 to just about nothing. Investors lost millions.

This trial is expected to go on for months. The Crown said it’s going to be calling other Nortel financial employees as witnesses, but warned the judge today that they may be viewed as accomplices to the fraud and their evidence should be approached with caution.

Video: Al Sweeney reports: