'White-collar' convictions mean prison time for Los Gatos man
By Gloria I. Wang
A Los Gatos man has been sentenced to 2 1/2 years in a state prison for the white-collar crimes of securities fraud and money laundering.
John T. "Jack" Dawson, 66, received his sentence April 11 after pleading guilty in September 2000 to two of the five counts charged and agreeing to aid prosecutors in the investigations of four other defendants.
According to court documents, Dawson was the attorney in charge of the San Jose offices of Colorado-based Scorpion Technologies, Inc., which had an office in Los Gatos as well. The now-defunct company "developed and sold computer software conversion systems and imaging processing technology."
The U.S. Attorney's Office said Dawson had "engaged in a scheme with others to defraud purchasers of the stock of Scorpion" between 1991 and 1993. According to the attorney's office, the five defendants inflated Scorpion's profits and sold stock based on the false information.
In the 2000 plea agreement, Dawson admitted to having participated in several schemes that inflated Scorpion's earnings. One of the schemes involved the company's acquisition of several offshore companies that falsely claimed to be buyers of Scorpion's products. Another inflated Scorpion's revenue when the company claimed to have exchanged four million shares of stock in return for computer software and hardware. Dawson admitted that those shares had been sold, but not for technology acquisition. Dawson "directed others to sign false audit confirmations for the purpose of misleading Scorpion's auditors."
Scorpion also issued 10 million shares to acquire an asset; part of the proceeds from the subsequent sale of the shares were returned to the company. Scorpion executives falsely claimed that those proceeds were payments to the company. Dawson "admitted that he directed that $70,000 of the proceeds ... to a bank account in Kilkenny, Ireland, in order to conceal the source of funds."
A federal grand jury indicted Dawson in August 1999, after a long FBI investigation.
In addition to 2 1/2 years in prison, which begins June 17, District Court Judge Susan Illston sentenced Dawson to restitution of $25 million and three years of supervised release.
San Jose resident Richard Bauer, 61, received his sentence of 41 months in prison April 29. The remaining defendants-Terry Marsh, James "Tracy" Marsh and Mario Andrade-have not yet received their sentences. Brothers Terry and Tracy Marsh and Bauer entered guilty pleas early last year.
Los Gatos, California Since 1881
