Fugitive ex-CEO faces $90M civil penalty

Tomo Razmilovic, former chief executive of Symbol Technologies, Tomo Razmilovic, former chief executive of Symbol Technologies, fled to Sweden in 2004 to avoid a $200-million securities fraud case. (Aug. 8, 2001) Photo Credit: Newsday File / Don Jacobsen

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Tomo Razmilovic, the fugitive former chief executive of Symbol Technologies who fled the country after being charged in a $200-million securities fraud case, has been hit with nearly $90 million in civil charges and fines in a case filed by the Securities and Exchange Commission.

In a ruling by U.S. District Court Judge Sandra J. Feuerstein in Central Islip last week, Razmilovic was ordered to return $41.7 million in ill-gotten gains from his tenure at the now-defunct Holtsville company, plus pay a $20.8-million penalty in connection with the case. Interest payments could add another $27 million. The ruling also barred him from violating federal securities laws and from serving as an officer of a public company.

Todd D. Brody, senior trial counsel for the SEC, called the ruling "a great decision."

The civil case was filed in 2004 at the same time authorities filed a 13-count criminal indictment against Razmilovic and eight other top Symbol officials. Because Razmilovic didn't return to the United States for SEC depositions in the civil case, Feuerstein rendered a default judgment against him in 2009.

Federal prosecutors called the accounting fraud at Symbol "breathtaking in its scope" when they filed case in 2004. Company officials "used a veritable playbook of corporate fraud to cook the books every which way they could," then-U.S. Attorney Roslynn Mauskopf said.

Razmilovic, who holds Swedish citizenship, fled to Sweden in 2004 after an arrest warrant was issued. He remains on the U.S. Postal Inspection Service's Most Wanted list with a $100,000 reward for his arrest and conviction.

In interviews with Newsday and public statements back then, Razmilovic maintained his innocence, declaring he was the subject of a "witch hunt" stirred by a frenzy of securities fraud cases over the past decade. He claimed the accounting fraud began before he became Symbol's chief executive.

"I still believe in the American judicial system," he said after his name appeared on the Most Wanted list, "but I'm starting to have doubts. That's why I'm staying in Sweden."

It's unclear whether federal authorities will be able to collect the funds he's been ordered to pay. A source familiar with the case said Razmilovic left no assets in United States when he fled, although $14.5 million belonging to him has been frozen in a Swiss bank account.

A lawyer for Razmilovic said his firm was "still studying" the court's opinion to evaluate his alternatives, which could include an appeal.

"We are very disappointed in the district court ruling in this case," said Jeff Coopersmith, a partner at the firm DLA Piper, in Seattle. "We respectfully disagree with the court that a default judgment was warranted and that the SEC's claims against Mr. Razmilovic for tens of millions of dollars in disgorgement have merit."

Another former Symbol executive, chief financial officer Kenneth Jaeggi, in 2008 pleaded guilty to a fraud charge and was ordered to pay $450,000 in restitution and $3.3 million in related civil claims. He was sentenced to three years probation.

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