Criminal charges laid against former top executives of Nortel Networks Corporation ("Nortel")



    TORONTO, June 19 /CNW/ - The Royal Canadian Mounted Police Greater
Toronto Area Integrated Market Enforcement Team (RCMP GTA IMET) has charged:

    
    Frank Dunn, age 54 of Oakville, Ontario, former CEO of Nortel;
    Two counts under Section 380(1)(a) of the Criminal Code of Canada;
    Two counts under Section 397(1) of the Criminal Code of Canada; and
    Three counts under Section 400(1) of the Criminal Code of Canada.

    Douglas Beatty, age 53 of Toronto, Ontario, former CFO of Nortel;
    Two counts under Section 380(1)(a) of the Criminal Code of Canada;
    Two counts under Section 397(1) of the Criminal Code of Canada; and
    Three counts under Section 400(1) of the Criminal Code of Canada.

    Michael Gollogly, age 49 of Oakville, Ontario, former Corporate
    Controller of Nortel;
    Two counts under Section 380(1)(a) of the Criminal Code of Canada;
    Two counts under Section 397(1) of the Criminal Code of Canada; and
    Three counts under Section 400(1) of the Criminal Code of Canada.

    --------------------------------------------------
    Section 380(1)(a) of the Criminal Code of Canada;
    Fraud Affecting public market

    Section 397(1) of the Criminal Code of Canada; and
    Falsification of books and documents

    Section 400(1) of the Criminal Code of Canada.
    False Prospectus
    

    The fraud-related charges include: Fraud Affecting Public Market,
Falsification of books and documents and False Prospectus. These charges
pertain to allegations of criminal activity within Nortel Networks during 2002
and 2003. National IMET Program Leader C/Supt. Stephen White says, "Protecting
and enhancing Canada's economic integrity is one of the RCMP's strategic
priorities. This investigation demonstrates that although capital market
investigations can be lengthy and complex, they are most effective when an
integrated approach is used from the outset. We remain committed to working
with our many partners nationally and internationally to prevent, detect and
investigate serious capital markets fraud."
    Pertaining to the Section 380 charge RCMP IMET allege that Dunn, Beatty
and Gollogly fraudulently misstated the financial results of Nortel. The RCMP
IMET further alleges in regards to the Section 397 charges that Dunn, Beatty
and Gollogly made false entries and omitted materials particular in the books
and documents in regards to the financial results of Nortel. The Section 400
charges allege that Dunn, Beatty and Gollogly circulated or published a
statement or an account whether or not it was written or oral, knowing that it
was false in a material particular, with the intent to deceive or defraud the
members, shareholders or creditors of Nortel Networks Corporation. All of the
charges pertain to the fiscal time period between January 1, 2002 and June 30,
2003, and allege that the financial statements of Nortel during this time
period were misstated. This fiscal time period represents the fiscal year of
2002 and the First Quarter and Second Quarter of 2003.
    "Investigations like this require the cooperation and support of many
agencies domestically and internationally," stated Officer in Charge of the
RCMP GTA IMET, Kevin Harrison. "It is through partnerships which leverage
expertise at the local, national and international levels that police are able
to complete investigations with this kind of complexity and scope. The
cooperation received from the Ontario Securities Commission, the Dallas Field
Office of the Federal Bureau of Investigation, the United States Securities
and Exchange Commission, and Nortel Networks itself, enhanced the ability of
the RCMP GTA IMET to advance the investigation."
    Dunn, Beatty and Gollogly are scheduled for a first appearance at
Newmarket Court on June 19, 2008.

    For more information on IMETs
    www.rcmp.ca/imets/imets_e.htm





For further information:

For further information: Sgt. Marc LaPorte, RCMP "O" Division Media
Relations, Office: (416) 790-3200, Cell: (416) 992-4409


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