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Auditor draws one-year term for altering files

Auditor draws one-year term for altering files

by Rick Turoczy on January 28, 2005

One of the first people charged under the new corporate-crackdown laws known as Sarbanes-Oxley will spend a year in jail after pleading guilty to falsifying audit files of a San Francisco company, NextCard, while it was under investigation, federal prosecutors said Thursday.

Thomas Trauger, an Ernst & Young partner who audited NextCard before its demise, pleaded guilty in October to the actions, which hindered a probe by the Securities and Exchange Commission into the collapse of NextCard, the online credit-card issuer. Under the sentence handed down Thursday, he also will pay a $5,000 fine and spend two years under supervised release, the U.S. attorney for Northern California said.

A call to Trauger’s lawyer, Edward Swanson, was not returned Thursday evening.

“I did not tell the SEC that certain workpapers . . . had been altered and considerable portions of those workpapers deleted in November 2001,” Trauger stated in the plea agreement.

Auditor draws one-year term for altering files

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