US high-tech companies were left reeling last week when a financial cover-up was exposed at the heart of one of the IT industry?s most influential trade organisations, the American Electronics Association (AEA).
A lawsuit filed in a Santa Clara court revealed that William Phillips, the former chief financial officer of the electronics association, has been accused of embezzling $800,000 over a 12-year period by writing out cheques to a non-existent business.
Phillips was removed from his position in March this year following the appointment of a chief operating officer who uncovered the alleged scandal.
The AEA sorted out a behind the scenes deal with Phillips, which allowed him to repay the money.
But he defaulted on a payment which was due on 30 June, forcing the association to make the matter public. He had already paid back $250,000, but he did not admit his guilt, the AEA stated in the lawsuit filed last week.
AEA chairman George Solman defended the decision of the association executive to keep the scandal under wraps by allowing Phillips to pay back the money.
?Which is our fiduciary duty ? to obtain maximum restitution for member companies or to grandstand with a criminal action?? Solman said.
The AEA represents more than 3,000 leading high-tech firms in the US and plays a vital role in co-ordinating lobbying campaigns on Washington.
Phillips? alleged scam was exposed by an anonymous phone call to the AEA?s chief operations officer, Lorraine Lavett. No criminal charges have been brought against him. Phillips was not available for comment.
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