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Tech Industry

Trade group CFO fired, suit says

The chief financial officer of the American Electronics Association was fired amid allegations of embezzlement, according to a lawsuit.

    The chief financial officer of the American Electronics Association was fired last March amid allegations of embezzlement, according to a lawsuit filed by the trade organization.

    For 12 years, William Phillips allegedly submitted falsified invoices and issued checks to a "dummy" corporation called "The Solutions Group," which claimed to provide consultants to the AEA. The checks were made out in amounts that were just under a $5,000 threshold that would have required corporate approval, according to the lawsuit, which was filed last week.

    Phillips is also being accused of using about $18,000 of AEA funds to purchase collectible gold coins.

    Phillips could not be reached for comment on the allegations, which were first reported by the San Jose Mercury News. His attorney, Stacy Shelton, declined to comment on the lawsuit today.

    After terminating Phillips's employment March 11, the group said it hired John Herrick as CFO. According to court papers, Phillips subsequently signed a confidential agreement for restitution.

    Under the agreement, Philips paid back $250,000 with no admission of guilt, with the remaining $800,000 to be paid back by June 30, 1997, according to the lawsuit.

    The AEA filed a civil suit after Phillips missed the deadline because "restitution is the highest priority," according to George Solloman, chairman of the trade group. The association has taken several steps to rectify the situation, including putting a lien on Phillips's home.

    In addition, the group has placed tighter controls on its expenditures, such as requiring the signature of either the chief executive officer or the chief operating officer on any checks more than $750. The association is also limiting the use of outside consultants.

    After an independent internal audit, the AEA said it is satisfied that no other officers are involved in improprieties and that no other financial irregularities will be discovered.

    Although the missing $800,000 represents a small percentage of the group's $20 million operating budget, Sollomon is intent on getting all of its money back.

    "We regard even $100 as being very material," he said. "We are a public trust, for the highly constructive purpose of representing the high-tech industry."