Dartmouth alumnus Jeffrey Sudikoff '77 plead not guilty earlier this month to federal charges he faked millions of dollars in profits to inflate the value of his company's stock.
Sudikoff, who donated over $3 million for the construction of the College's Sudikoff Laboratory for Computer Sciences in 1993, was indicted last month by a federal grand jury in Los Angeles for allegedly selling millions of dollars in fraudulent stock from his Los Angeles-based communications firm.
Sudikoff, the chief executive of IDB Communications Group, Inc., and Edward Cheramy, IDB's president, were indicted on 19 counts, including conspiracy, fraud and false filings to the U.S. Securities and Exchange Commission.
His trial is set for March 10, 1998 in Los Angeles.
In a statement released shortly after the indictment, Sudikoff said he regretted the charges brought against him.
"We are disappointed in the Government's decision to file charges against Jeffrey," Sudikoff's attorneys Brad Brian and Michael Shepard said in a joint statement. "We believe no charges should have been brought."
The indictment caps off an investigation by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigative Division who found Sudikoff and Chemary inflating IDB's 1994 income in an alleged effort to increase the IDB's stock value.
Upon discovery that IDB's income would be significantly less than the stock market analyst predictions, the pair allegedly inflated the company's income by millions of dollars, closing IDB's 1994 income at $15,094,000 -- a figure far exceeding its actual value.
The allegedly inflated income was reported to Merrill Lynch as "record revenue and earnings."
In order to support the increase in income, Sudikoff and Cheramy allegedly created a fictional sale of "satellite transponder capacity" to a company called British Telecom that purportedly supported revenues of $5 million, according to the indictment.
Sudikoff allegedly created fraudulent letters purportedly written on British Telecom letterhead to support the transaction, according to the indictment.
In March 1994, Sudikoff allegedly sold $1.6 million of IDB stock through an account set up in a friend's name. Sudikoff then allegedly transferred the proceeds into an off-shore account, according to the indictment.
However, according to a statement by Sudikoff's lawyers, no stock was ever sold from Sudikoff's account, and Sudikoff received no financial profit from any stock trades in 1994.
Neither Sudikoff nor his lawyers could be reached for comment.
Sudikoff and his wife Joyce donated over $3 million to the College in 1993 for the construction of Sudikoff Laboratory.
Sudikoff owned the Los Angeles Kings hockey team from October 1995 to October 1996.
At Dartmouth, Sudikoff majored in English and mathematics and served as news director of WDCR, the College's radio station.
