4 years for ex-ClearOne exec Flood

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Former ClearOne Communications CEO Frances Flood was sentenced to four years in a federal prison on Wednesday for masterminding a scheme to artificially inflate the company's 2001-02 revenue to boost its share price.

Flood, 54, convicted early last year of conspiracy, making false statements, securities fraud and perjury, told U.S. District Court Judge Dee Benson prior to sentencing that she knew she had made bad decisions and poor choices.

But with her voice quivering and all vestiges of a once hard-bitten corporate executive gone,the former high-profile corporate manager and motivational speaker who was viewed by many as a role model, told the judge she believed in her heart she didn't commit a crime.

"Every decision was made with the knowledge of [ClearOne's] board members," she said.

Federal prosecutors, though, had convinced a jury that Flood orchestrated a scheme to make it appear that ClearOne, a Utah-based maker of video and audio conferencing equipment, was profitable.

And they established that ClearOne, under Flood's direction, persuaded its distributors to accept products they did not order by promising them they didn't have to pay for the merchandise until it was sold. The company then booked those shipments as sales to make it appear revenue was rising.

Co-defendant Susie Strohm, who for a time served as ClearOne's chief financial officer, was sentenced to two years of probation for perjury.

In court Wednesday, several of Flood's friends and family members portrayed her as a kind, compassionate woman -- someone who would bake "dozens and dozens of cookies for people in need." They pointed out that she has since earned an advanced ministerial degree and is working with a hospice organization caring for those who society has abandoned in the last days of their lives.

In handing down his sentence, U.S. District Court Judge Dee Benson said Flood's post-criminal conduct has been remarkable. "She seems to have genuinely refocused her life," the judge said, adding that Flood -- in conducting the scheme at ClearOne -- did not appear to be out for personal gain.

Still, Benson said he could not reconcile why Flood has never accepted blame for her actions. "I don't understand the rigid denial of this criminal behavior."

Benson gave Flood until Aug. 2 to get her affairs in order before surrendering to federal authorities. Once her prison sentence is completed -- she can receive a reduction of 52 days a year for good behavior -- Flood will remain under supervision for 36 months.

Stewart Walz, an assistant U.S. attorney who led prosecution of the case, said authorities were pleased with the sentence, even though the government had asked she be incarcerated for nine years.

He said the four-year sentence should serve as a deterrent to others who might engage in white-collar crime.

Neither Strohm nor Flood would comment on their sentences.

Strohm, 49, committed perjury testifying in a deposition taken as part of a U.S. Securities and Exchange Commission lawsuit filed in 2003 that paralleled many of the charges raised in the criminal trial. In addition to 24 months probation, Strohm also was sentenced to 150 hours of community service.