Fraud settlement costs Xerox six $22m

Six former Xerox executives agreed to pay a total of $22m (£14m) yesterday to settle long running allegations of accounting fraud at the copying company.

The agreement with the securities and exchange commission, the US financial regulator, follows earlier action against both the company and KPMG, the accounting firm that audited Xerox's books during the period in question.

The latest action, which includes two former chief executives, Paul Allaire and Richard Thoman, shows the SEC's determination to hold individuals to account as part of its crackdown on corporate crime. The charges are for securities fraud and "aiding and abetting" Xerox's scheme to mismanage its books.

The alleged fraud took place between 1997 and 2000. The complaint said that the company increased the recognition of equipment revenues by $3bn and pre-tax profits by $1.4bn in order to meet targets given to Wall Street.

The others named in the settlement are former chief financial officer Barry Romeril, former controller Philip Fishbach, former assistant controller Danile Marchibroda and Gregory Tayler, erstwhile director of accounting. None has admitted any wrongdoing.

As well as fines, they must give up compensation earned from meeting targets. Xerox agreed to pay a $10m fine to settle SEC allegations of fraud last year.

The SEC filed fraud charges at the start of the year against the accounting firm KPMG and four partners over audits of Xerox.

Lucent Technologies also announced that Mr Allaire is to leave its board as a result of the settlement of a civil suit brought by the US government.