The United States Attorney's Office for the Northern District of California announced that Michael A. Ofstedahl, of Pleasanton, California, pled guilty yesterday to obstructing a federal investigation, in violation of 18 U.S.C. § 1505.  In pleading guilty, Mr. Ofstedahl, a former Vice-President at Adaptec, Inc., admitted that he gave misleading answers under oath during an investigation by the Securities and Exchange Commission ("SEC") into unusual trading in Adaptec shares by Dr. Robert Rutner.

Michael Allen Ofstedahl, 43, who is currently Vice-President of Sales and Business Development for Milpitas-based Velio Communications, Inc., was originally charged on July 30, 2002, when a federal grand jury sitting in San Jose returned a nine-count indictment charging him with violations arising from his previous employment as Vice-President of Original Equipment Manufacturer sales at Adaptec, Inc., also headquartered in Milpitas.  The indictment charged Mr. Ofstedahl with conspiracy to commit insider trading and insider trading, in violation of 18 U.S.C. § 371 and 15 U.S.C. §§ 78j and 78ff and 17 C.F.R. § 240.10b-5, as well as perjury, in violation of 18 U.S.C. § 1621, making a false statement to the Securities and Exchange Commission ("SEC"), in violation of 18 U.S.C. § 1001, and obstructing a federal investigation, in violation of 18 U.S.C. § 1505.

In his plea agreement, Mr. Ofstedahl admitted that he gave misleading testimony under oath to the SEC on June 29, 1999.  The SEC was investigating suspicious trading in Adaptec shares by Dr. Robert Rutner.  SEC staff attorneys specifically asked Mr. Ofstedahl whether he had given information to Dr. Rutner about Adaptec's outlook for the previous quarter.  Mr. Ofstedahl, who had known Dr. Rutner for approximately 10 years, denied having done so.  In his guilty plea, Mr. Ofstedahl admitted that his answers "were designed to mislead the SEC staff attorneys."  "Through my answers," he admitted, "I intentionally conveyed the false impression that I had not provided information to Mr. Rutner concerning Adaptec's probable fiscal third quarter results when, in fact, I had provided that information to him." 

Mr. Ofstedahl is scheduled to be sentenced on March 1, 2004 at 1:30 p.m., before Judge James Ware, in San Jose Federal Court.  The maximum penalty for a violation of 18 U.S.C. Section 1505 is five years imprisonment and $250,000 fine.  The plea agreement stipulates that Mr. Ofstedahl be placed on five years probation and serve a sentence of home confinement between six and 12 months, the precise term of confinement to be determined by the Court.   If the Court, in its discretion and after reviewing the presentence report, were to decide not to impose the sentence agreed to by the parties, Mr. Ofstedahl would be free to withdraw his plea of guilty and the case would proceed to trial.

The prosecution is the result of a criminal referral from the San Francisco District Office of the Securities and Exchange Commission.  The criminal case was investigated by Special Agents of the Federal Bureau of Investigation.  AUSA David Callaway prosecuted the case with the assistance of legal technician Tracey Anderson.

All press inquiries to the U.S. Attorney's Office should be directed to Assistant U.S. Attorney Matthew J. Jacobs at (415) 436-7181, or Assistant U.S. Attorney Matthew Parrella in San Jose at (408) 535-5042.