http://www.sec.gov/litigation/litreleases/lr17522.htm
Unify corporation, located in Sacramento, California, is yet another database management software company, committed fraudulent activity by recognizing revenue in barter and contingency transactions. Former CEO Gholamreza (Reza) Mikailli, 49, of Sara toga, Calif., and former CFO Gary L.
Pado, 38, of Sacramento, Calif. received a complaint from the SEC indicating from May 1999 to May 2000, the two executives recorded fradulent revenue under the GAAP(general accepted accounting principles). This activity involved Mikalli and Pado "roundtripping", a non-agreement between Unify and their customers to repay funds they were given. In some instances, Unify provided money to customers with the expectation of investment, however the money purchased Unify products. In other instances, Unify contracted with so-called Funded Development Agreement for services. These companies provided no services and the funds were used to purchase Unify products. This fradulent activity resulted in an overstatement of amounts ranging from 61% to 150 %. In the end, Mikalli and Pado were charged with criminal securities fraud.
