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March 8, 1987

PARADYNE ENDS WOES WITH GUILTY PLEA

By CBR Staff Writer

The end of four years of misery is in sight for Paradyne Corp, Largo, Florida – at a substantial price. The company decided to plead guilty to 14 counts of conspiracy to defraud the US government in connection with its $100m 1981 contract for distributed systems for the US Social Services Administration. The price is $1.2m in fines, plus $8.1m to settle shareholder suits over the issue – and the removal of chairman, president and chief executive Robert Wiggins, who remains at the company in a non-management role. All other charges against the company and four of the individual officers or former officers names in the charge are dropped, and the charges against Wiggins and the other three will lapse after a year. The US government has dropped civil false claims charges against Paradyne, and lifted the bar on it bidding on future federal contracts. The new president and chief executive is former executive vice-president Jerry Kendall, and the new chairman is Paul Ferri, who is a director.

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