Peregrine Systems consultant reaches agreement with prosecutors

By Scott Files

Published on April 13, 2006

Michael D. Whitt, the alleged co-conspirator faced conspiracy and securities fraud charges that were filed against him in the wake of the corporate accounting scandal at Peregrine, a technology company once ranked among the biggest in San Diego.

Mark F. Adams, a San Diego based lawyer representing Mr. Whitt says that "We have not actually finalized a settlement in the base," but, have reached an agreement "in principle."

The scandal first began four years ago when discrepancies in Peregrine's financial statements began to be questioned. The company acknowledged accounting irregularities in May 2002 and filed for bankruptcy reorganization within six months. The SEC began its investigation shortly thereafter.

The fraud case claims that there was an elaborate con to boost financial statements. During a 33-month period that began in late 1999, Peregrine's revenue was overstated by $509 Million with an understated loss of $2.6 billion. Government estimates calculate the loss to shareholders at an estimated $4 billion as a result of the company's collapse.

Mr. Whitt is the seventh person to reach a tentative plea agreement in the criminal case.

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