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Judge Drops Charges Against HP's Dunn

(San Jose, Calif.) A judge dropped all charges against former Hewlett-Packard Co. board Chairwoman Patricia Dunn, who was accused of fraud in the boardroom spying scheme that rocked one of Silicon Valley's most respected companies.

Three other defendants in the case also will avoid jail time after their lawyers entered no contest pleas Wednesday to misdemeanor charges of fraudulent wire communications in Santa Clara Superior Court.

Judge Ray E. Cunningham did not immediately accept the pleas by former HP ethics chief Kevin Hunsaker, and private investigators Ronald DeLia and Matthew DePante, and said the charges against them will also be dropped in September after they complete 96 hours of community service and make restitution.

State prosecutors announced earlier Wednesday that Dunn and the three other defendants had agreed to plead guilty to reduced charges and that Dunn would be spared community service because of her health. She revealed last year that she was being treated for advanced ovarian cancer.

But the office of Attorney General Jerry Brown later said that release was incorrect. Lawyers for Dunn and the other defendants said deal with the state called for Dunn's case to be dismissed.

"This is a vindication of Patty Dunn in every sense of the word," said her lawyer, James Brosnahan. "It shows what she's maintained throughout: that she's innocent of these charges."

The four were initially charged in October with four felony counts: use of false or fraudulent pretenses to obtain confidential information from a public utility; unauthorized access to computer data; identity theft; and conspiracy to commit each of those crimes.

Each of those charges carried a fine of up to $10,000 and three years in prison.

While the deal with state prosecutors allows all four defendants to escape jail time, federal prosecutors have said their investigation of the HP leaks probe is ongoing.

"The guilty pleas offered today will not prevent federal prosecutors from filing criminal charges against Hunsaker, DeLia or DePante -- if they so choose," the attorney general's office said in its statement.

Dunn, Hunsaker, DeLia and Depante did not attend Wednesday's hearing.

A fifth defendant, private investigator Bryan Wagner, was also charged by the state in October. But the state's case against him was dropped after Wagner pleaded guilty to the same charges in federal court and agreed to testify for the prosecution.

No other federal charges have been filed in connection with HP's effort to spy on its own board members.

The boardroom scandal shook Hewlett-Packard, with Dunn stepping down as chairwoman and several other top executives resigning over their roles in the subterfuge.

HP's investigation, which took place in 2005 and 2006, erupted into a national scandal after HP disclosed that the detectives it hired had obtained the private phone records of directors, employees and journalists in an effort to ferret out the source of media leaks.

Using a shady tactic known as "pretexting," the detectives obtained the Social Security numbers of their targets and fooled telephone companies into divulging their detailed call logs.

Shares of the region's oldest and biggest technology company were unscathed by the scandal, as the stock price steadily rose through much of last year.

HP's stock was up 15 cents, to $39.70, in afternoon trading Wednesday on the New York Stock Exchange.

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