Ex-Nortel Execs Charged

TORONTO –- The Royal Canadian Mounted Police Greater Toronto Area Integrated Market Enforcement Team (RCMP GTA IMET) has charged:

Frank Dunn, age 54 of Oakville, Ontario, former CEO of Nortel;
Two count under Section 380(1)(a) of the Criminal Code of Canada;
Two counts under Section 397(1) of the Criminal Code of Canada; and
Three counts under Section 400(1) of the Criminal Code of Canada.
Douglas Beatty, age 53 of Toronto, Ontario, former CFO of Nortel;
Two count under Section 380(1)(a) of the Criminal Code of Canada;
Two counts under Section 397(1) of the Criminal Code of Canada; and
Three counts under Section 400(1) of the Criminal Code of Canada.
Michael Gollogly, age 49 of Oakville, Ontario, former Corporate Controller of Nortel;
Two count under Section 380(1)(a) of the Criminal Code of Canada;
Two counts under Section 397(1) of the Criminal Code of Canada; and
Three counts under Section 400(1) of the Criminal Code of Canada.

The fraud-related charges include: Fraud Affecting Public Market, Falsification of books and documents and False Prospectus. These charges pertain to allegations of criminal activity within Nortel Networks during 2002 and 2003. National IMET Program Leader C/Supt. Stephen White says, “Protecting and enhancing Canada’s economic integrity is one of the RCMP’s strategic priorities. This investigation demonstrates that although capital market investigations can be lengthy and complex, they are most effective when an integrated approach is used from the outset. We remain committed to working with our many partners nationally and internationally to prevent, detect and investigate serious capital markets fraud.”

In a separate release:

TORONTO -- Nortel(1) (Toronto:NT.TO - News)(NYSE:NT - News) is today issuing a statement in response to RCMP charges against former Nortel executives.

"Nortel has not been charged and was not the target of this investigation. The company has fully cooperated with the RCMP and will continue to do so. This is in relation to former executives of the company who were dismissed for cause in 2004.

"Nortel is rebuilding a great Canadian company while upholding the highest standards of integrity and ethics. Incredible progress has been made in the last few years, and today a new Nortel is emerging under the leadership of a new management team with a proven track record. The company has restored a solid financial controls foundation, is gaining traction with customers and is focused on the future.

"Nortel and its employees are highly determined to compete and win in the marketplace and today's announcement by the RCMP does not distract the company from the work ahead."

Nortel Networks Ltd.