Former Enterasys CEO Pleads Guilty

Prosecutors said Enrique "Henry" Fiallo participated in an accounting fraud that cost the company at least $20 million. Fiallo made the plea in U.S. District Court Wednesday.

The Andover, Mass., firm was based in Rochester at the time of the scheme, which was designed to inflate the company's revenues to meet Wall Street projections, authorities said.

Fiallo is scheduled to be sentenced Dec. 17. He could receive up to five years in prison and a $250,000 fine. He is the fourth former company executive to plead guilty this year.

Gail Spence Luacaw, a former company vice president, pleaded guilty to conspiracy to commit securities fraud Aug. 19. Former company assistant controller Anthony Hurley and former executive Gary Workman pleaded guilty to wire fraud in May.

Former chief financial officer Robert Gagalis and former senior vice president for finance Bruce Kay have pleaded not guilty to federal charges and are to be tried in October.

Enterasys was the chief spin-off firm of Cabletron Systems Inc., co-founded by Gov. Craig Benson before he became governor. Benson is a former member of the Enterasys board of directors' audit committee. He has not been named in any charges and has said that Enterasys directors brought to light the matters now under investigation more than two years ago.

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