Ex-CEO of Lernout & Hauspie Arrested
.c The Associated Press
WINCHESTER, Mass. 5/26/01 (AP) - The former chief executive of a Belgian-based speech recognition software company was arrested on fraud charges Saturday near his home.
U.S. Marshals arrested Gaston Bastiaens, 54, on a Belgian warrant charging insider trading, stock market manipulation, and violation of bookkeeping laws associated with the collapsed Lernout & Hauspie Speech Products N.V.
Bastiaens was being held over the weekend in Braintree, Mass., and is scheduled to be arraigned Tuesday. It was not immediately known if Bastiaens had a lawyer.
Extradition proceedings will not be held until after arraignment, said U.S. Marshal spokesman Drew Wade.
The Marshal's office said Bastiaens falsified company earnings to inflate stock prices for his personal benefit.
``He got $25 million out of holdings before the firm's stock fell through the basement,'' U.S. Marshal Chief Art Roderick said in a statement.
L & H, headquartered in Belgium with U.S. headquarters in Burlington, Mass., collapsed after its stock fell roughly $10 billion in value in one year. The company has $495 million in total debt, a Belgian court said last month.
The company was Europe's largest maker of speech recognition and translation software. Both Microsoft and Intel invested millions in L & H.
But accounting scandals and fraud allegations sent the stock crashing, and forced the firm to seek bankruptcy protection in Belgium and the United States late last year.
L & H is also being investigated for fraud in the United States.
Last month, Belgian investigators also charged company co-founders Jo Lernout and Pol Hauspie and former board member Nico Willaert with falsification of documents and stock manipulation. The three have denied the charges.
AP-NY-05-26-01 1709EDT
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