CONCORD, N.H. (AP) — Three former top executives of Enterasys Networks Inc. were indicted Wednesday on federal charges they conspired to inflate the technology company's revenue. A fourth executive pleaded guilty to one count of wire fraud.

Peter Papps, acting U.S. attorney for New Hampshire, said the three men facing charges conspired to inflate reported revenue in order to bolster the value of Enterasys stock and to further their careers.

The indictment charges former chief financial officer Robert Gagalis, 49, of Rye; and former vice presidents Bruce Kay, 53, of Yarmouth, Maine; and Gayle Spence, 45, of Newfields, with conspiracy, securities fraud and wire fraud.

"Mr. Gagalis denies any allegations of wrongdoing and very much looks forward to being exonerated," his lawyer, David Kistenbroker, said.

Kay's lawyer, Lloyd Macdonald, said the indictment "reflects a gross misjudgment as to prevailing accounting standards in 2001."

"At no time did (Kay) approve the entry of false information of any kind on the company's books with regard to any transaction," Macdonald said.

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Spence could not be reached immediately for comment.

Assistant U.S. Attorney William Morse said Gary Workman, 57, of San Ramon, Calif., pleaded guilty to wire fraud and will be sentenced in September. Workman was president of Enterasys' Asia-Pacific sales division.

Gagalis, Kay and Spence were to be arraigned in U.S. District Court today on Thursday.

Papps said the scheme involved altering and backdating documents; entering into secret side deals; and making false and misleading statements in filings with the Securities and Exchange Commission, press releases and to outside auditors.

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