| NEW YORK
NEW YORK Feb 20 A federal judge declared a
mistrial on Wednesday in a criminal case against two former top
executives at Vitesse Semiconductor Corp who were
accused of inflating company earnings and backdating stock
It marked the second time U.S. District Judge Paul Crotty in
Manhattan had declared a mistrial in the case against former
Chief Executive Officer Louis Tomasetta and former Executive
Vice President Eugene Hovanec.
"It's our hope that this will be the end of the case," said
Gary Lincenberg, a lawyer for Hovanec.
Lincenberg said the jury sent a note on Tuesday to the judge
indicating it had deadlocked 6-6. Crotty asked the jury to
continue deliberating, but jurors again said Wednesday they
remained deadlocked. The deliberations had begun Friday.
"After seven years of investigation, civil lawsuits settled
many years ago, and now a second lengthy criminal trial that
ended in a mistrial after another jury deadlocked, it is my hope
that the government will now close its case," Dan Marmalefsky, a
lawyer for Tomasetta, said in an e-mail.
Ellen Davis, a spokeswoman for U.S. Attorney Preet Bharara,
declined to comment.
Tomasetta, 64, the co-founder of Vitesse, and Hovanic, 61,
were indicted in 2010, more than two years after they were
dismissed from the California-based chipmaker.
Prosecutors said that from 2001 to 2006, Tomasetta and
Hovanec schemed to deceive Vitesse's investors about the
company's financial troubles following the bursting of the tech
The two men were also accused of backdating stock options
issued to Vitesse employees for the three-year period starting
in 2001. Illegal backdating occurs when companies tie stock
options to a prior date when share prices are low but don't
properly account for it.
In the first trial, prosecutors had sought to convict on
charges that included securities fraud and false statements to
auditors. After the initial mistrial, the judge dismissed the
bulk of the case.
A new indictment filed in December 2012 as a result charged
Tomasetta and Hovanec with a single count each of conspiracy to
commit securities fraud.
Two other executives in the case, former Chief Financial
Officer Yatin Mody and former Director of Accounting, Nicole
Kaplan, have pleaded guilty to securities fraud and other
The case is USA v. Louis Tomasetta et al, U.S. District
Court for the Southern District of New York, 10-1205.