Topics: Fraud, Federal Bureau of Investigation, Entrepreneurship Pages: 2 (792 words) Published: June 30, 2011
Watson was driven by a desire to be wealthy and powerful. "He was attracted to wealth like a moth to a flame," and "He knew from the very beginning that he wanted to be an entrepreneur" says James Cameron, who is currently writing a book on CyberNet and its late chief executive. The FBI first investigated Watson in 1986 as the subject of a fraud probe. In 1987, Watson pled guilty to mail fraud after investigators determined he had swindled the unnamed investor as well as others and used the money for his personal expenses. He was sentenced to three years in prison, serving just less than 24 months at Allenwood Federal Prison in Pennsylvania before being paroled, and fined $230,000. John Straayer, co-founder of the company that would become The CyberNet Group, left CyberNet in 1992 after suspecting Barton Watson of embezzling company funds and falsifying company records. He told authorities that his former business partner was involved in criminal business practices, but the investigation never came to fruition. Says Straayer: "I always felt that if the authorities pressed a little harder back then, then none of this would have happened." Former CyberNet Group employee John Westra, who only spent about six months at the company, discovered the stickers were tags identifying the inventory as remanufactured products, and found out that the company was passing the computers off as new. This incident triggered the FBI to take a closer look at the company. Hastings Public Schools filed a lawsuit against CyberNet, and the case was later settled out of court. The FBI affidavit states that in early 2004, CyberNet's former CPA, Guy Hiestand of Hiestand and Co had stopped working for CyberNet in 2002, after discovering discrepancies in the company's accounts and suspecting fraud. He found that someone had created phony audit opinions and financial statements with his firm's letterhead and Hiestand's name attached to it. FBI authorities entered CyberNet's building,...
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