The former chief executive of a Baltimore technology company that folded amid an accounting scandal was sentenced yesterday to nine years in prison for defrauding a bank and two investment companies, and for falsifying the company's records.
Michele Tobin, 48, was also ordered by U.S. District Judge J. Frederick Motz yesterday to repay $3.5 million to the bank and investment firms, the U.S. attorney's office said.
Tobin was head of Network Technologies Group Inc., also known as NTG.
Privately held since its founding in 1996, NTG installed cable for utility and telecommunications companies, including Comcast Corp., AT&T; Corp. and WorldCom Inc.
The company inflated its accounts receivable, which served as collateral for its line of credit with Mercantile-Safe Deposit and Trust, according to court documents.
It also produced false financial statements that a local brokerage firm used to attract NTG investors, the documents say.
NTG folded in July 2002.
The company's troubles were exposed when John M. Collard, a turnaround specialist, was brought in by the company's board of directors on July 1, 2002, to try to save the company. Collard, who owns Strategic Management Partners Inc. of Annapolis, uncovered accounting irregularities and closed the company less than two weeks later.
About 125 workers lost their jobs when NTG shut its Fells Point offices. Money that had been deducted from their paychecks to go into 401(k) accounts was never deposited there, and the employees did not receive health benefits for several weeks before the company closed, Collard has said.
Tobin and other NTG officers were charged last year with 10 counts each of mail, bank and wire fraud after an investigation of the company.
They were accused of defrauding Mercantile and two of the company's investors, Smith Whiley Co. of Connecticut and the Abell Foundation, a Baltimore nonprofit philanthropy.
The charges followed a joint investigation by the U.S. attorney's office and the FBI.
Thomas Bray, NTG's former chief financial officer, pleaded guilty last year to one count of fraud.
Beverly Baker, the former comptroller, also pleaded guilty last year.
Charges against Victor Giordani Jr., the former chief operations officer, were dismissed last year.
Tobin pleaded guilty last year to one count of wire fraud as part of a plea agreement with the U.S. attorney's office.
Tobin was sentenced to five years of supervised release to follow her nine-year prison sentence.
She was ordered to pay $550,000 to the Abell Foundation, $980,000 to Smith Whiley and $1.95 million to Mercantile in restitution.