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Star-Telegram.com:

Nine months ago, a RadioShack executive was indicted by an Ohio grand jury on charges of fraud and participating in a Ponzi-like scheme at her previous job -- and she's still working at RadioShack headquarters in downtown Fort Worth.

It's shocking that the company hasn't fired her or insisted on a leave of absence, one legal expert said, given that she was part of a group accused of cooking the books and now works closely with senior executives at a publicly traded company.

She was hired less than a month before her indictment, and RadioShack said senior management and certain board members were briefed on the charges "at the earliest stages."

"They remain satisfied that the company has responded properly," spokesman Eric Bruner said in an email.

Dawn Callahan, 39, is a vice president of merchandising. In court records, she is known as Dawn Callahan-Kettlewell, and she had a court hearing scheduled Thursday in Cleveland's Cuyahoga County. The judge was busy, and the trial has now been set for Sept. 12.

Callahan, her husband, Dirk Kettlewell, and two other executives are charged with 31 counts of securities fraud, forgery and aggravated theft in connection with InkStop, a failed startup based in Ohio. A dozen investors lost $6 million, the prosecutor said, alleging that the money had been used to pay other investors, including close associates. 

....

By 2009, InkStop was bankrupt. It closed 150 stores and liquidated its assets, owing $48 million to 1,000 creditors, including $1 million to employees. Board members eventually paid back much of the workers' lost earnings.

RadioShack may not have known that an indictment was coming on Callahan, but the civil cases amounted to a bright warning sign, said Joseph Ahmad of Houston law firm Ahmad, Zavitsanos & Anaipakos and an expert in employment cases.

Executive Employment Lawyer Joseph Ahmad in Star-Telegram article

While it's important to not assume guilt, Ahmad said most employers would have fired Callahan immediately, even if she had a contract. She's a potential liability for RadioShack if she works with a vendor or employee who later sues the company, because a conviction could be used against her in any court case.

"RadioShack is rolling the dice that she'll be acquitted," Ahmad said.

He often represents executives who were fired for trivial reasons, so he's generally sympathetic. But the charges against Callahan are so serious that they undermine the trustworthiness of the organization, he said. That's likely to hurt employee morale and damage the company's reputation.

"I can't imagine how this got through the board's management committee," he said.  

http://www.star-telegram.com/2011/06/03/3126880/indicted-executives-continued.html

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