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August 2000

Federal jury finds HP 3000 broker guilty of wire fraud

Hardwarehouse founder also convicted on money laundering charge

The US Attorney’s Office in Eastern California has secured a conviction against a founder of what was the biggest HP 3000 broker in the US, as Richard Adamson was proven guilty of defrauding HP while buying and selling HP 3000 systems.

Adamson’s 11-day trial in Sacramento featured testimony from four other principals in the conspiracy to illegally use HP’s SS_CONFIG software to steal 3000 user licenses during 1997 and 1998. Two of the prosecution’s witnesses were former HP employees who aided Adamson in the fraud, while another was Adamson’s brother and partner John Adamson.

A jury found Rich Adamson guilty of eight counts of wire fraud and one count of money laundering. Twenty-three other counts of honest services wire fraud — the instances where Adamson allegedly bribed HP employees Deborah Balon and Marc Loriau — resulted in a hung jury.

The jury heard testimony that both Adamson brothers “secretly bought a pirated copy… of SS_CONFIG, which allowed [Richard] Adamson to illegally upgrade used computer servers he received from Hewlett-Packard. He then defrauded HP by causing the company to transfer licenses on those servers in its upgraded state, without ever paying Hewlett-Packard for those upgrades.”

The US Attorney’s Office press release reported that Richard Adamson “took elaborate steps to conceal this crime following a search warrant at Hardwarehouse…He met with his employees at bars and restaurants to coordinate their stories.” Testimony offered at the trial included a story that Adamson frisked his employees in a restaurant bathroom before talking with them, “then wrote notes to them on a napkin, which he ate after showing it to them.”

Judge Garland Burrell commented at the trial’s end that Richard Adamson, who testified in his own defense, had committed perjury and obstructed justice.

Judge Burrell remanded Richard Adamson into custody following the July 21 verdict, and ordered a sentencing hearing for October 6. Adamson faces a total of 11 years in prison. Sentencing on the four others who participated in the fraud, then signed guilty plea agreements and testified against Adamson, was scheduled for August 18.

 


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