McAfee Ex-CFO Charged With Fraud

U.S. prosecutors on Tuesday charged a former chief financial officer at McAfee.com Corp. with trying to defraud shareholders by exercising stock options in 2000, when he knew the financial statements were wrong.

Evan Collins, 42, exercised 30,000 shares of Network Associates Inc., which had spun off McAfee and later repurchased the company, and sold them for a profit of about $250,000, the Justice Department charged in San Francisco federal court. The prosecutors said Collins knew other executives had inflated the financial statements.

The criminal charge came as the Securities and Exchange Commission said it reached a civil settlement with Collins in the SEC’s third case involving accounting at the Santa Clara, Calif.-based maker of McAfee anti-virus software.

Collins, who agreed to pay almost $570,000, neither admitted nor denied wrongdoing. His attorney did not return a call for comment.

U.S. prosecutors have alleged that Network Associates overstated revenue by more than $470 million and understated losses by about $330 million between 1998 and 2000. McAfee.com was the online anti-virus unit that Network Associates sold during the Internet boom and repurchased in September 2002. Network Associates changed its name to McAfee Inc. this year. Shares closed Tuesday at $28.90, up 10 cents, on the New York Stock Exchange.