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FBI to investigate Xerox officials
Tuesday, September 24 2002
by Ciaran Buckley


The FBI is conducting an investigation into Xerox's past accounting issues and is
considering pressing criminal charges against the company's officials. 









In statement, Xerox said that it would cooperate fully with the US attorney's
office.



The investigation relates to accounting practises, which resulted in the company
booking over USD6.4 billion of equipment revenues and overstating its pre-tax
income by USD1.41 billion between 1997 and 2001. 



Xerox has already made a settlement with the SEC over this issue, having paid a
USD10 million fine in April of this year and restated its results from 1997
through 2001.  Xerox has repeatedly asserted that it has placed the accounting
scandal behind it. But the FBI is understood to be focusing on current and former
company executives 



FBI agents are understood to be questioning James Bingham, a former assistant
treasurer at Xerox, who claims that he was fired for attempting to highlight
unethical accounting practises at the company.

 

The SEC is also pursuing a civil case against former and current Xerox
executives, as well as Xerox's former auditors, KPMG. The SEC alleges that Xerox
management received over USD5 million in performance-based compensation and over
USD30 million in profits from the sale of stock. 



The SEC is now taking a hard line against corporate fraud, with the hope of
forcing executives to return incentive-based compensation that they received
while wrongful accounting practises were boosting companies' earnings and its
stock price.



Xerox employs over 79,000 worldwide, having cut over 13,500 jobs in 2001. The
company employees around 2,200 people in Ireland, including 600 in manufacturing
in Dundalk, 1,500 in a support centre in Ballycoolin, Co. Dublin and around 90
people in a sales and marketing division in Dublin. 



In May it emerged that the IDA was attempting to recover over EUR8 million of
grants relating to the loss of 350 jobs in its Dundalk plant in 2001. Xerox has
received over EUR41 million from the IDA in grant aid.