FROM:
George W. Kennedy, District Attorney   CONTACT PERSON:  
Julius L. Finkelstein, Deputy District Attorney
(408) 792-2744   For Release on December 4, 2002     HIGH TECH EXEC SENTENCED TO 11 YEARS IN STATE PRISON AND ORDERED TO PAY MORE THAN 4 MILLION DOLLARS IN RESTITUTION FOR SECURITIES FRAUD AND TAX EVASION   Steven Allan Ristau, 44, of San Jose, who was convicted of bilking more than 900 investors out of more than $4 million by selling investors on technology that never existed was sentenced this morning to 11 years in state prison and fined more than 2.7 million dollars.  In addition, Ristau was ordered to pay more than 4 million dollars in restitution to investors.   In October the founder and former president of PacketSwitch.com was found guilty by a Santa Clara jury of securities fraud, selling unqualified securities and three felony counts of tax evasion—filing false state income tax returns and failing to file a tax return.   Ristau falsely claimed to investors that PacketSwitch.com had developed a new wireless technology for broadcasting movies over the Internet to the company's set top player from a distance of twelve miles.  In reality, the company's set top player was nothing more than a Windowstm PC fitted with a standard wireless networking card that received its signal from a commercially available wireless LAN hidden in the ceiling, just a few feet away.    In addition to the securities fraud charges, Ristau was also convicted of failing to report hundreds of thousands of dollars in salary that he received in 1999 and 2000 as president of Packetswitch.com, and salary that he received in 1998 as CEO of a prior company called Internet Telephone Company.    Deputy District Attorney Julius Finkelstein prosecuted the case.  Santa Clara Superior Court Judge Joyce Allegro presided over the case, which took four weeks to try.   The District Attorney’s Office acknowledges the assistance of the U.S. Securities and Exchange Commission and the California Franchise Tax Board.  In July 2001 the Commission charged Ristau and PacketSwitch.Com with civil violations of the federal securities laws.   ###

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