IE 11 is not supported. For an optimal experience visit our site on another browser.

Former Symbol CEO declared a fugitive

The indicted former CEO of Symbol Technologies was declared a fugitive Wednesday after his lawyer told federal prosecutors the executive would not return to the U.S. to face arraignment.
/ Source: The Associated Press

The indicted former CEO of a Long Island technology company was declared a fugitive Wednesday after his lawyer told federal prosecutors the executive would not return to the U.S. to face arraignment.

Tomo Razmilovic, the former president and chief executive of Symbol Technologies Inc., was believed to have returned to his native Croatia from England, where he had been living since leaving the company two years ago, prosecutors said.

His Thursday arraignment on securities fraud and other charges was canceled and a warrant for his arrest was issued in the United Kingdom, said Robert Nardoza, a spokesman for U.S. Attorney Roslynn Mauskopf.

Razmilovic’s lawyer did not immediately return a phone message seeking comment.

Razmilovic, six other former top executives of Symbol Technologies Inc. and their chief legal counsel were charged last week with deceiving investors by inflating the company’s reported earnings by more than $200 million.

An indictment unsealed in federal court in Brooklyn accused the defendants of devising accounting schemes to meet Wall Street projections for earnings by the leading maker of bar-code scanners and wireless networks and to fatten their own incomes.

The Holtsville-based company has agreed to pay $139 million in fines and restitution. That includes a $37 million fine to settle a Securities and Exchange Commission case alleging a pattern of fraud between 1998 and early 2003.

Symbol’s current management has said the firm has been working to put problems created by its former leaders behind it.

Authorities alleged that the defendants were so obsessed with meeting analysts’ estimates that they ignored required accounting practices and brazenly manipulated revenue and earnings.

The company allegedly recorded sales of products to vendors who made no commitment to buy them; overstated expenses to create a “cookie jar” reserve that could be tapped to bolster results; allowed executives to set their own prices when exercising stock options; and used false accounting entries to bolster the bottom line.

The SEC also accused the company of interfering with its investigation by destroying or withholding incriminating data.

Five former managers have previously pleaded guilty to conspiracy charges arising from the case.

Symbol Technologies Inc.'s former chief executive will not appear in court on Thursday to face securities fraud charges, making it likely he would be declared a fugitive, people close to the investigation said on Wednesday.

Tomo Razmilovic's lawyer David Nachman called federal prosecutors based in Brooklyn Wednesday morning saying that his client would not attend the arraignment session in a Long Island court on Thursday, said a source familiar with the matter, who spoke on condition of anonymity.

Nachman did not return calls made on Tuesday and Wednesday seeking comment.

The government issued arrest warrants for eight top former defendants last Thursday. Seven of them, including former chief financial officer Kenneth Jaeggi and former general counsel Leonard Goldner, have pleaded not guilty and were released on bail.

Razmilovic, who resides in Europe, was expected to appear in court on Thursday on charges including conspiracy and securities fraud and was expected to plead not guilty. But the plan changed on Wednesday, according to another source, who also spoke on condition of anonymity.

One of the sources said it was unclear why Razmilovic was not going to appear in court on Thursday.

Symbol, a maker of handheld data terminals and bar code scanners, on Thursday settled civil charges brought by the Securities and Exchange Commission, agreeing to pay $139 million to the government, to shareholders and to a U.S. Postal Service fraud unit last Thursday.

The company escaped criminal prosecution by admitting wrongdoing, revamping its management and promising other changes.

The U.S. Attorney's Office in Eastern District of New York said the defendants used a stunning array of fraudulent accounting manipulations to allow them to claim to have met the targets.