The 3000 broker fraud investigation which HP broke open during Harry Sterling’s tenure saw another development, as HP’s own staff admitted to participating. Two former HP employees admitted to accepting well over a quarter-million dollars in bribes over a three-year period to ensure that Hardwarehouse could purchase used HP 3000s in exclusive transactions. Deborah Balon and Marc Loriau of Saratoga, Calif. pled guilty to accepting $253,800 in cash, plus trips and gifts from World Systems, Inc. which did business as Hardwarehouse, according to the US Attorney’s office for the Eastern District of California. Balon and Loriau worked at an HP division which took in used HP 3000s from HP lease customers and from other sources, The US lawmen said the couple “gave Hardwarehouse virtually exclusive access to certain very valuable used equipment HP was selling in the computer equipment aftermarket.”

A press release issued by US Attorney Paul Seave said that Hardwarehouse founder and principal John Adamson already admitted to participating in “this and a related scheme to defraud HP.” Adamson’s sentencing — he pled guilty to two counts of mail fraud in April in exchange for his help in the investigation — is set for October 29. Sterling said in his HP World speech regarding such brokers “we have put the brakes on unauthorized sales activities for both new and used HP 3000s.” The plea agreement that Balon and Loriau signed had them admit to a single count each of mail fraud, in exchange for agreeing to cooperation in the government’s continuing broker fraud investigation. Among the bribes the pair admitted to receiving from Hardwarehouse principals were “trips to exotic locations around the world, high-end household furnishings, artwork, a furnace, a burglar alarm system, a fur coat, and a diamond tennis bracelet” Sentencing for the two was set for January 14, 2000.