Compaq
Files Suit Against Harry Martin, Millennium Technology Group Inc.,
Shafiq Ahmad, Stephen Pridemore, and Creative Resources Group, Inc.
Committed
to Eliminating Illegal Brokering, Compaq Charges Defendants with
Fraud, Breach of Contract, and Conspiracy
HOUSTON,
August 8, 2001 - Compaq Computer Corporation (NYSE: CPQ) today
announced it is filing suit in federal court against Harry Martin
and Shafiq Ahmad, principals of Millennium Technology Group, Inc.
of Virginia, to recover more than $20 million defrauded from Compaq
through illegal brokering schemes. Compaq has also named Creative
Resources Group, Inc. (CRGI) and its president, Stephen Pridemore
of South Carolina as defendants.
Compaq's
complaint states that defendants Martin, Ahmad, Millennium, Pridemore
and CRGI conspired to defraud Compaq into paying millions of dollars
in unearned rebates and special marketing support funds. According
to the suit, defendants told Compaq that they had large United
States government contracts that required significant rebates
and discounts from Compaq. According to the complaint, no such
contracts existed with the U.S. government agencies; instead,
defendants collected payments from Compaq and diverted Compaq
products into the brokering market. Compaq is bringing claims
for conspiracy, fraud, breach of contract and tortious interference
with its contractual relations.
"Compaq
is committed to ensuring the integrity of Compaq products and
protecting its customers and authorized distribution channels,"
said Thomas C. Siekman, senior vice president and general counsel,
Compaq Computer Corporation. "We will show that the defendants
created a scheme to defraud Compaq of millions of dollars based
on non-existent United States government contracts. Companies
and individuals who attempt to illegally divert Compaq products
will be held accountable," concluded Siekman.
Compaq
is seeking compensatory damages of more than $20 million as well
as interest, costs, and attorneys' fees. The suit was filed in
the United States District Court for the Eastern District of Virginia
in Alexandria.
