Taxpayer left with huge bill after ex-iSoft execs cleared after seven years
THE former directors of healthcare software provider iSoft have been found not guilty in a long-running fraud case after the jury was dismissed over a procedural problem.
Former chief operating officer Steve Graham from Knutsford, finance director and latterly chief executive Tim Whiston from Lymm, and finance director John Whelan from Cheadle were accused of plotting to deceive investors.
A fourth former iSoft executive, Barnsley FC owner Patrick Cryne, was also charged, but did not stand trial due to ill-health. The case against him has also been dropped.
They were charged with conspiring to make misleading financial statements between October 2003 and July 2006 following a seven-year, £5m investigation by the Financial Services Authority, now the Financial Conduct Authority (FCA).
A central allegation in the case was that the firm counted revenue from a £42.8m software contract with the Irish health service as early as November 2003, although the deal was not confirmed until 2005.
The first four-month trial ended in a hung jury last August. Then the three-month retrial collapsed earlier this month when the jury was discharged, with the reason for this being covered by a reporting restriction.
This has now been lifted and according to an FCA spokesman the case collapsed after the FCA’s barrister disclosed information that had not been seen by the defence. Judge Anthony Leonard ruled that the time required for this to be considered would be unfair to the jury.
The FCA has now abandoned the case. Formal not guilty verdicts were recorded and the defendants received an order for costs.
Anthony Barnfather, partner at law firm Pannone who represented John Whelan, said: “John has spent the last seven years with these allegations hanging over him causing immense stress and anxiety. He has been unable to work, has suffered great financial loss and his reputation left in tatters. He has also had to endure two four-month trials.
“John has always strenuously denied the allegations and is delighted he can now finally begin to rebuild his life. This is the second time the jury has been discharged in this case which has cost the public purse millions of pounds. We are delighted the prosecution has at last discontinued the matter.”
Tracey McDermott, director of enforcement and financial crime at the FCA, said: “This is of course a disappointing outcome. The problems that have arisen in this case result from a particularly unusual set of circumstances, which are unlikely to recur.
“As with all our cases, win or lose, we will look to see what lessons can be learned for the future. In the meantime, we continue to focus our energy on the strong pipeline of cases we have under investigation.”
The company, which was based in Manchester, is now part of US software giant CSC and is located in Banbury, Oxfordshire.