The United States Attorney's Office for the Northern District of California announced today that Robert Gordon, a former Vice-President of Cisco Systems previously convicted of defrauding and embezzling millions from Cisco, was ordered to pay a total of $27,397,206 in restitution to Cisco and to forfeit an additional $5.58 million to the United States.  The sentence was handed down by U.S. District Court Judge Jeremy Fogel following Mr. Gordon pleading guilty to two counts of wire fraud in violation of Title 18, United States Code, Section 1343, and one count of insider trading in violation of Title 15, United States Code, Sections 78j(b) and 78ff(a) and Title 17, Code of Federal Regulations, Section 240.10b-5. 

Mr. Gordon of Palo Alto was indicted by a federal grand jury on May 9, 2001.   In the May 9 indictment he was charged with two counts of wire fraud in violation of Title 18, United States Code, Section 1343.  On July 30, 2002, the United States Attorney's Office filed a superseding information re-alleging  the two counts of wire fraud from the original indictment, and adding a single count of insider trading.  Under the plea agreement, Mr. Gordon pled guilty to all three counts and consented to the criminal forfeiture.

On December 20, 2002, Judge Fogel sentenced the Defendant to 66 months in federal prison, and restitution of  over $20 million, as well as three years of supervised release.   The Court at that time ordered a further hearing to resolve two disputed items of restitution arising from Mr. Gordon's taking of 154,525 shares of Terayon stock and expenses incurred by Cisco Systems during the investigation of Mr. Gordon. 

A formal hearing regarding the disputed restitution issues was held on May 27, 2003.  Following that hearing, Judge Fogel determined that Mr. Gordon would be ordered to pay $12,593,902.23 in restitution to Cisco for the Terayon embezzlement.  The court also ordered Mr. Gordon to reimburse Cisco for $1,038,477 of its investigative costs and required him to pay $2,424,913 in prejudgment interest.  According to the court's Final Order of Forfeiture, the United States will pay $15.8 million to Cisco from Mr. Gordon's funds that were seized by the government.  Cisco will receive an additional $3.8 million from funds that Mr. Gordon had posted with the court as bail.

Mr. Gordon is scheduled to begin serving the prison sentence on July 7, 2003.