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IBM accused of fraud

A case started in a Pennsylvania district court in which IBM and several of its employees are accused of violating the Racketeer Influenced and Corrupt Organizations (RICO) act.

The case was brought by Devon IT and its European subsidiary and alleges that IBM's hardware division, known as the System Technology Group (STG) defrauded the company of $12 million it had invested in blade technology. Individuals named along with IBM in the case are Thomas Bradidich, Bernard Meyerson, James Gargan and Rodney Adkins.

Devon claims that around September 2005, senior IBM executives met its CEO John Bennett and its president Joe Makoid, to discuss an investment in an IBM server scheme called the Aspen Project. The project involved the development of a blade PC in a cabinet connecting over LANs and WANs.

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