It was New Year's Eve 1997 when Digital Lightwave's chief, Bryan Zwan, made his biggest deal: a $9-million contract for his signature product, a 10-pound device that tests telephone lines.
At 5:30 p.m., Zwan phoned his production staff and gave them a tall order: Ship the 308 units right away. It would help prop up dismal sales numbers.
But his overtaxed workers -- they had put in 100-hour weeks during the holidays -- didn't have enough time or materials.
As the night wore on, the crew sent incomplete and unassembled units to a shipping warehouse, giving the impression the order was filled. Digital had done this before. The company even had shipped units to salesmen's homes for storage and booked them as sales.
A manufacturing manager named Chuck Anderson became fed up. Most company whistleblowers typically alert the Securities and Exchange Commission to possible wrongdoing. But Anderson reported the trouble to his own higher authority: the Church of Scientology.
He wrote a "knowledge report," addressed to church leaders, warning that the New Year's Eve shipments were the latest in a troubling pattern in Digital that could create a "huge potential flap" for Scientology.
"What happens if someone goes to the newspapers, the investors, the SEC?" Anderson, a Scientologist, wrote in his report.
"Not to mention putting Scientology and Scientologists at risk."
Zwan, a longtime Scientologist who has given millions to the church, had moved his high-tech startup company from Santa Monica, Calif., to downtown Clearwater two years earlier, locating it just two blocks from the church's international spiritual headquarters.
He has long insisted that Digital has no connection to the controversial church. Zwan said he never hired people because they are Scientologists and never sought church advice on company matters.
"We are a public company," Zwan said. "We have nothing to do with the Church of Scientology. It has no role in this company."
But a four-month review by the St. Petersburg Times, drawing on thousands of pages of court documents and dozens of interviews, makes it clear that the fortunes and the misfortunes of Digital Lightwave have been profoundly affected by influential Scientologists with close ties to the church.
Zwan's stewardship of Digital has been tumultuous, marked by wild success that made the Belleair physicist one of America's richest men, and by a debacle that badly wounded the company.
Other local companies are run by Scientologists with little scrutiny. But Digital's high profile as a publicly traded company subject to federal regulation yields a rare look at how Scientology factors into the workplace when the CEO is a church follower and major contributor.
Digital's inside story is one of Scientologists emerging at critical points to play key roles. A Scientologist helped Zwan develop Digital's fiber-optic technology. Scientology facilities, including the landmark Fort Harrison Hotel in Clearwater, were backdrops for important company negotiations. Zwan tapped Scientologists for his early management team. And fellow Scientologists were Zwan's early backers, many reaping riches from Digital's run on Wall Street.
To further understand Scientology's tie to Digital Lightwave, consider that Zwan hired as one of his top executives Denise Licciardi, the sister of Scientology's worldwide leader, David Miscavige.
Quickly promoted and given a six-figure salary, Licciardi was widely regarded as Zwan's right hand at Digital. She urged him to run day-to-day operations by following Scientology founder L. Ron Hubbard's business practices known as "LRH Tech."
Digital could "become a showcase of LRH Tech," Licciardi wrote in one memo to Zwan. "This was what you communicated to each of us was your dream."
But when federal regulators investigated Digital in the late 1990s for allegedly inflating its sales, Licciardi escaped blame. Her central role remained under wraps for years. The church was spared the "huge flap" feared in the knowledge report.
Scientology's leaders insist the church neither acted on the knowledge report nor protected Licciardi. They emphatically say they play no part in Digital Lightwave and never have.
"The church doesn't get involved in managing their business," said Marty Rathbun, a high-ranking church leader based in Los Angeles.
But Zwan's interest in and devotion to Scientology was front and center in his creation of Digital Lightwave. One of his earliest investors, onetime Scientologist Brian Haney, recalls Zwan's can't-miss pitch to join him in building the company.
"We were going to keep some for ourselves and live like kings, of course," Haney said. "The main amount of money was going to end up in Scientology's hands."
As a boy in East Texas, Bryan Zwan surprised his parents by buying a secondhand, 40-foot radio tower and erecting it in his back yard. In high school, the future physicist impressed his friends by hooking up a ham radio in his car to contact people halfway around the world.
Zwan, 54, earned his doctorate at Rice University in the same field of science that once interested Scientology founder L. Ron Hubbard. The Scientology patriarch used physics to design an experiment with sound waves that led to one of his first conclusions about the mind. Zwan used physics to design an instrument that led to one of the hottest lightwave products on the digital market.
Fiber optics -- high-speed, hair-thin lines that use light waves to transmit data -- were emerging as the technology of the future in 1990. Zwan and a co-developer came up with a portable, lightweight device for technicians in the field to test fiber-optic lines.
Phone companies, cable companies and Internet providers all soon would look to fiber-optic lines to handle burgeoning voice and data traffic.
Zwan coined the name "Digital Lightwave" and created a logo of multicolored rectangles seemingly in motion. "Pretty cool, huh? I came up with that," Zwan said with a dimpled grin.
Gushing about Digital's technology, Zwan goes from CEO to professor. It uses logic. Algebra is involved. And voltages and polarities.
It's "40 colors of light pulsing at 2 1/2-billion times a second in one little fiber the size of a human hair," Zwan says, tugging on an arm hair.
Digital's technology can reach in, pick one of those colors and separate it out for inspection. Or as Zwan puts it, "This is technology to reach inside the light."
In 1993, Zwan needed investors to take Digital Lightwave out of the incubator. He found a wealthy business partner while visiting Scientology's international spiritual retreat, the Fort Harrison Hotel in Clearwater.
One day over lunch in the hotel's Hibiscus room, a Scientology staff member introduced Zwan to Brian Haney, a fellow entrepreneur visiting from Columbus, Ohio. Haney had become a millionaire in his 20s selling toys through his Great American Fun Corp.
Digital Lightwave was no more than a startup then, fueled by Zwan's enthusiasm and vision. He had yet to manufacture a product and had just a handful of employees. Haney was intrigued.
Days later, Zwan traveled to Columbus to discuss a deal, meeting Haney at the Scientology facility there. But there was a twist: Zwan had a Scientology staff member in tow. Haney had plenty of questions about Digital, but they would have to wait.
First on the agenda was Scientology. The church wanted $100,000 for its planned Super Power building in Clearwater, a massive, $50-million complex now under construction. Haney balked. He had already given the project $200,000. But Zwan and the church staffer kept asking. Eventually, Haney wrote the check.
The businessmen then turned to Digital Lightwave. The two Scientologists discussed using Hubbard's teachings to run the company.
They had an unspoken understanding, Haney said: No one would mention Scientology and Digital in the same breath. "It was known people would frown upon it," Haney said. Investors and potential customers might be leery of a company with ties to a controversial church.
As Digital grew, Haney said, they planned to donate millions back to the church.
"We were going to be two Scientologists who ran a Scientology company that would bring in a ton of money that would get donated to Scientology so Scientology could put up Super Power buildings all over the globe," said Haney, now 43.
Zwan refuses to talk about his early days with Haney. But he insists: "I did not start Digital Lightwave with the aspiration of it as a vehicle to invest in Scientology." Further, he says Scientology's business principles were never used at Digital.
The entrepreneurs made a pact. For $5-million, Haney said, he wound up with 49 percent of the company and left daily operations to Zwan.
With Haney's millions, Zwan moved his small company to Clearwater in 1995, renting space in the green glass Atrium Building on Cleveland Street near Scientology headquarters.
The move, Zwan said, had nothing to do with the church. The Tampa Bay area topped an 11-city survey because it was near water and in a state with no income tax.
Haney believes otherwise: "One of his reasons for moving the company to Florida was ... he could hire Scientologists. It was a given that all Scientologist employees were superior to all non-Scientologist employees."
By late 1995, Digital was ready to debut its flagship optic tester: the ASA 312.
The relationship between Haney and Zwan had frayed, though. Haney and his wife, Linda, had grown disillusioned with Scientology and left the church. The church labeled Mrs. Haney a "suppressive person," a name given to people the church believes are working against it. Church members are not to associate with a suppressive person.
Haney said Zwan summoned him to a meeting at the Fort Harrison with church staff member Mary Voegeding Shaw, now president of FLAG, Scientology's spiritual retreat in Clearwater. Haney recalled the conversation:
"Mary Voegeding says to me because my wife is a declared (suppressive) person I cannot be a partner in business with Bryan Zwan and that I only have two choices: I have to either divorce my wife or stop being Bryan Zwan's partner."
Haney looked at Zwan.
"That's right," Zwan said to Haney. "Those are the two choices."
Haney thought: "I'm in a room with crazy people."
Church officials bristle at Haney's account, describing it as "completely fabricated" and "out there." They say he has no credibility. His funding of anti-Scientology efforts in recent years is evidence he targets Scientology to "drag it through the mud," Rathbun said.
Haney says Zwan told him that the company's future was rocky and that he should get out while he could. Haney agreed.
Needing money to buy out Haney, Zwan turned to Scientologists Leon Meekcoms and Gerald Ellenburg, both real estate investors.
The two agreed to help raise the cash. But within a few months, they were complaining Zwan had not repaid investors and had not followed through on other promises.
Ellenburg and Meekcoms detailed their complaints in March 1996 in two knowledge reports addressed to high-ranking church officials.
Ellenburg requested an immediate review by the church. He warned that while he, Zwan and Meekcoms were "bound" to settle their disputes through "church channels," other investors were not. Those "not bound by the rules of our church" could go to court, he noted.
A church ethics officer told Ellenburg and Zwan to settle their dispute themselves.
Despite the friction among investors, Digital started selling its product, recording $6-million in sales in 1996. Zwan decided to sell stock to the public, a bold move to generate cash so his young company could grow faster.
To help navigate the expansion, Zwan recruited Seth Joseph, a 41-year-old securities lawyer from Miami, as his No. 2. One of the few non-Scientologists in Digital management, Joseph was given a $250,000 salary and up to 656,666 stock options, potentially worth millions.
Another executive came aboard then, too: Denise Licciardi, a 36-year-old Scientologist and sister of the church's leader, Miscavige.
While she had no formal education beyond high school, Licciardi was a go-getter with administrative experience at other companies, including a New Hampshire firm run by Scientologists who followed L. Ron Hubbard business principles.
Zwan soon promoted Licciardi to vice president of administration, paid her a $123,000 salary and gave her 60,000 stock options.
Her authority bothered Joseph, who questioned her qualifications. "She was very, very close to Bryan beyond what her skills would warrant," he said. "It was because of her relationship with Bryan in Scientology."
Zwan said he "didn't know her, (she) wasn't a friend." Licciardi applied for the job after hearing about it from her mother, who lives in Clearwater.
With Zwan's management team in place, the once-tiny private company had grown to 90 employees and was about to become a Wall Street player.
But first, a personnel matter needed tidying up before the company could go public. Digital's investment banker asked company brass if it was true that executive vice president Elizabeth Weigand was, indeed, a felon. She was. In 1980, Weigand was convicted of trying to extort money from her uncle, former U.S. Sen. Thomas Eagleton, D-Mo., who said at the time that he believed his niece intended to give the money to Scientology. She resigned from Digital.
On Feb. 6, 1997, Digital Lightwave staged a successful initial public offering, trading at $12 a share. For Zwan, that meant his 20-million shares were suddenly worth $240-million.
After Zwan, the biggest stakeholder was Norton Karno, L. Ron Hubbard's former personal attorney attorney, whose shares jumped to more than $7-million in value.
Also hitting the jackpot was Scientologist Doug Dohring, who served as Digital's president for just eight months. When he cashed out his stock options in late 1997, long after leaving the company, he made more than $1-million.
Left out of the millionaire's jubilee was Haney, the early investor who had left Scientology. Saying he had been tricked into selling back his shares, Haney later sued Zwan, claiming his stock would eventually have been worth $235-million.
Not visible to Wall Street were the atmospherics at Digital Lightwave.
Just months after coming aboard, a frustrated Licciardi wanted more of Hubbard's "Admin tech" in the workplace. She wrote Zwan a nine-page memo reminding him that in recruiting her and other Scientologists, he had promised to use the Scientology methods.
"We left our lives behind for a reasonable salary (and) a small ... amount of stock to help you attain your goal," she wrote. "Here all we are trying to do is get to be a billion-dollar company in the telecom industry. Why don't we just apply the tech?"
Though Hubbard's practices were not formally adopted, the aura of Scientology was present at Digital. The company's organizational chart closely resembled Scientology's "org boards," where departments are referred to as divisions.
Former controller Mike Tinsley said he didn't understand the company's structure until he visited a Clearwater drugstore run by a Scientologist. "They had the exact same org chart on their wall as we had in our company," Tinsley said.
Gossiping and joking about Scientology even got workers in trouble. Tinsley said he was instructed to fire an accounting clerk who mentioned to a co-worker that she had seen credit card statements detailing how much some Scientologists had donated to the church.
Technical writer Sean Ward was fired as a contractor after e-mailing three Digital employees and saying about Scientology: "Can you believe people in your company really believe this?"
In early 1997, the newly public Digital was being directed by Zwan from his Clearwater "war room." Employees said he set unrealistic goals: Double sales every quarter; quadruple sales by the end of the year.
The aggressive efforts came after first quarter sales missed the targets and the stock tumbled as low as $3 a share.
In the following months, Digital reported overblown sales numbers. Salesmen loaned to clients demonstration units that were counted as sales. Units were stored at employees' homes, but counted as sold goods.
Documents obtained by the Times detail another messy episode not revealed to investors. At the center: Zwan's fellow Scientologist, Licciardi.
It was December 1997, and Digital was racing to fill orders before the year-end closing of the books.
Customers were returning Digital's product. Manufacturing employees were working late, filling orders that had already been booked as sales in the previous quarter. Without a big contract, the company might have to declare fourth-quarter "negative sales" -- a nearly unheard-of admission that more product was returned than sold.
Then that big contract arrived, literally at the last moment: New Year's Eve. Pac Pacific of California ordered $9-million worth of Digital's testing units.
Zwan turned to Licciardi to get the shipment out ASAP.
Company records suggested all the units were assembled and shipped New Year's Eve. In fact, only 71 of the 308 units were finished despite the scrambling.
Some workers labored until 3 a.m., then grudgingly came back in later on New Year's Day. One was Chuck Anderson. His wife was five months pregnant and fed up with his overtime. Moreover, Anderson was tired of Licciardi's bossy ways. He just had to tell somebody.
So days later, he did. He wrote an 11-page, single-spaced knowledge report to Scientology leaders and Zwan, detailing all he had seen the last few months.
Anderson wrote that Licciardi was out of control. She was hurting morale by screaming, cursing and pushing people too far, he said. She was bypassing the chain of command. It was Licciardi, he wrote, who came up with the idea of putting half-built, half-tested units into boxes to give the impression production was done.
Digital Lightwave was "vulnerable" because too many people knew what was happening, he wrote, and bad publicity could put "Scientology and Scientologists at risk given the local scene."
The "local scene" in January 1998 was the rancorous controversy over the death of Scientologist Lisa McPherson. A month before, police had taken the unprecedented step of recommending criminal charges in connection with her death while in the care of fellow Scientologists. The case was making headlines around the world.
Anderson also reminded church officials of a Scientology-related business scandal: "Look what happened with TradeNet."
A Dunedin company owned and run by Scientologists, TradeNet was investigated by state regulators as a possible pyramid scheme. State records showed that Scientologists at TradeNet also were keeping the church in the loop. One communication said church officials were "s---- bricks" over the company's bad press.
Zwan said he relayed Anderson's report to Licciardi without reading it. Later, he ordered Anderson to shred it.
In a recent interview, Zwan said he never has written any knowledge reports to the church about company business and he found the fact Anderson did "extremely odd."
"It's never been done before, never done since," he said.
Church officials say there is no record they ever received Anderson's report. "We could spend hours and hours and hours going and checking this to say with absolute certainty that nobody ever got any copy of that," said Scientology official Mike Rinder. "We can't guarantee that there may not be a person out there that may have seen something."
As it turned out, all the commotion on that memorable New Year's Eve ended in a whimper. Digital's board of directors refused Zwan's plea to count the Pac Pacific sale as revenue.
But the overblown sales had caught up to Digital. Three weeks after the New Year's Eve episode, the company issued a "restatement" of its earnings to investors, publicly acknowledging earlier financial reports were not accurate.
Nearly half the sales Digital reported in the second quarter of 1997 involved deals that either never happened or were not closed. A stunning 79 percent of third quarter sales were wiped off the books.
The restatement triggered SEC and Nasdaq investigations, and more than 20 shareholder lawsuits. And as the company was reeling from the bad publicity, it was facing another crisis internally.
Licciardi told higherups that on New Year's Eve she had shipped out a couple of dozen partly filled boxes to be counted as sales. And co-workers said she had done it before. The company's top brass was astounded.
"It was clear she had to go," said Joseph, the lawyer who served as Zwan's No. 2. "She had committed criminal conduct. She admitted to it. ... It was devastating."
Tensions came to a head on Jan. 26, an overcast Monday just four days after the restatement.
Scientologists and non-Scientologists turned on each other as the company's top two financial officers, Joseph and Steve Grant, called for Zwan to fire Licciardi.
A group of Scientologists in the company went to Zwan to rally support for Licciardi.
That morning, some said they saw Scientologists in distinctive naval uniforms in the corridors. Others said it was hired security.
But the effect was the same, particularly on Grant, the company's chief financial officer. Grant, who is not a Scientologist, feared retribution if a prominent Scientologist like Licciardi was asked to leave. He removed photos of his family from his desk.
"There were some very, very angry shareholders (because of the restatement) and now there were some very, very angry Scientologists," Grant said.
The skittish financial officer even arranged for a security guard at his home. Grant wasn't the only one taking precautions. Zwan signed off on a $1,500 request for an electronic sweep for eavesdropping devices in Digital's offices.
Licciardi said she was shocked when Zwan started pointing fingers at her. She felt "like I'm in the f--- twilight zone," Licciardi would later tell SEC investigators. "Suddenly he was making it seem like I was running wild over the organization unbeknownst to him."
But Licciardi saw Zwan soften, and by day's end she was helping him coordinate a legal strategy to combat the SEC investigation. For help, she contacted widely known broadcaster and fellow Scientologist Greta Van Susteren, who recommended a former SEC attorney.
"She said we should say we are friends of Greta Van Susteren's," Licciardi wrote in an e-mail to Zwan.
Joseph said he received the unexpected news that Licciardi was still part of the team from Zwan himself. Zwan reminded him "whose sister she is" and said it would be "excruciating" to try to terminate her, Joseph said. Zwan won't discuss his conversations with Joseph and Licciardi.
Three days later, it was non-Scientologist Joseph who was forced out. Zwan said Joseph's firing was part of a companywide restructuring. Joseph cried foul, filing an arbitration complaint to recoup thousands of stock options. An arbitrator later sided with Joseph, ordering Digital to pay him $3.8-million.
Joseph's attorney accused Zwan of orchestrating a "coverup" in which "the person who wouldn't go along with it was terminated and the people who went along get enriched."
But Licciardi didn't survive either. In two weeks, she was gone too. Yet her departure was largely on her own financial terms, which she spelled out in an e-mail to Zwan titled "Ending Cycle," a Scientology term. She told Zwan she was "without a doubt guilty of executing on orders without question."
Licciardi wrote she applied "Simon Bolivar to a "T,' " a Scientology phrase referring to loyalty.
She promised Zwan she would not bail on him. "For you," she added, "I will take the fall."
Other than receiving one year's salary instead of three, Licciardi received the severance package she demanded: vesting of her 70,000 stock options; forgiveness of a $71,000 Digital loan; three cell phones; and a laptop computer.
She also successfully pleaded with Zwan not to publicly mention her departure or connect her with any wrongdoing. Her fear: "In the public eye, I will take the heat for the mistakes made at Digital Lightwave Inc. and due to my familial connections, will pay for this dearly on my road to spiritual freedom," she wrote.
With Joseph and Licciardi gone, Digital's board zeroed in on Zwan, worried the company was faltering under his stewardship.
Board member Bill Seifert, a Boston-area venture capitalist, said he urged Zwan to turn Digital over to a professional manager or "his baby would die."
Jeff Marshall, another director at the time, called Zwan "incompetent."
"He was a big shareholder and I wish we had had the guts to fire him right then and there," he said, "but we didn't."
Digital's stock continued its slump through 1998. By year's end, the shares traded at $2.31 a share, an 83 percent annual decline. Sales were up, but so were losses. The board's dissatisfaction mounted.
That December, Zwan stepped aside as CEO, and the board found a replacement with no ties to Scientology.
Gerry Chastelet, CEO of Wandel & Goltermann Technologies in North Carolina, arrived on a self-described mission to build up Digital's reputation with customers and play down ties to Scientology.
With Digital's stock hovering around $2 a share, Chastelet believed he could pump up the stock tenfold.
Raised on a farm in Niagara Falls, Ontario, Chastelet wasn't averse to hard work. As a youth, he spent summers stacking 100-pound bags of flour in a mill and sweating inside a steaming-hot nickel refinery.
Digital was moving into new headquarters, a $19-million building at the south end of the Bayside Bridge. Yet, old ghosts lingered.
Tension between Scientologists and non-Scientologists was still palpable. Employees complained their e-mails were being read, although Chastelet never found proof.
"There was a general mistrust between certain factions about what other factions may be thinking, saying or doing," Chastelet recalled. "Some felt every action they did was being watched."
Seeking to defuse tension, he held a companywide briefing to declare any infringements on privacy would not be tolerated. He ordered an electronic sweep looking for bugs. Nothing was found, he said.
He told his human resources director to remove and destroy any Scientology-related documents in personnel files. The purge included some "statistics reports," a Scientology business tool used to track employee productivity.
Scientology-based organizational charts were used when he arrived, Chastelet said, but not for long. "Divisions" such as sales and manufacturing were renamed "departments." The treasury division under Zwan became the finance department under Chastelet.
Chastelet brought analysts and customers to Digital's new offices for PowerPoint briefings.
He thought: "If we do a good job ... all of the chattering about Scientology will no longer absorb the Internet pages," Chastelet said. "And people will start to recognize the company for what it is."
In May 1999, Digital landed Lucent as a customer; a month later, Cisco placed its first order. Then came Nextel and Level 3.
By July, Digital showed signs of weathering the restatement fiasco, recording a profit amid the dot-com bull market.
Sales continued to surge, and by January 2000, Digital shares were trading at a lofty $62.75. The company was profiled as a poster child of overpriced tech stocks in a front-page article in the Wall Street Journal.
Two months later, Digital's stock reached $150 a share, giving it a remarkable value of $4-billion. The Clearwater enterprise, with about 200 workers and $50-million in annual sales, was valued more at the time than today's market value for Toys "R" Us, an international company with 60,000 employees and more than $11-billion in sales.
So impressive was Digital's growth, the company topped the St. Petersburg Times list of the 50 best-performing public companies in the Tampa Bay area for its 2000 results.
Digital got more good news in March: The SEC settled its case against Digital and various company officers. But there was bad news for Zwan. The SEC sued him separately, singling him out as the one principally responsible for false filings in an "earnings management scheme" in 1997.
But while facing that action, Zwan, even from the sidelines, became a very rich man. He cashed out about $430-million in stock between 1999 and the fall of 2001 while still retaining majority ownership in the company. Forbes estimated Zwan's net worth at $600-million in elevating him to the magazine's 2001 list of the 400 wealthiest Americans.
The wealth creation spurred by Digital was hardly restricted to Scientologists. Several top executives with no connection to the church made millions, notably Chastelet, who cashed out more than $19-million in stock options in one year alone.
The party lasted longer than expected. Even when tech companies were retrenching in early 2001, Digital was hiring engineers and expanding overseas. To build morale, Chastelet arranged to give away three white, 2001 Volkswagen Beetles to workers whose names were drawn at random.
But there were growing hints Chastelet wouldn't stay in the driver's seat for long.
Zwan still was the company's biggest shareholder and was exerting control behind the scenes, putting allies on the board.
"Bryan wants to control the board, control the company, control the CEO," Chastelet said, "and in a public company, that's pretty difficult to do."
Bill Seifert, an exiting board member, noted: "This was a founder who was not going to go anywhere and was accustomed to and insisted on calling certain shots."
On Oct. 24, the SEC settled its lawsuit with Zwan, paving the way for his comeback. Two days later, he rejoined Digital's board of directors.
In January, frustrated by Zwan's growing involvement in day-to-day operations, Chastelet resigned.
"I don't think we ever anticipated it would work out in the long run," Chastelet said.
Today, Digital still is a big player in fiber-optic testing, with a 36 percent market share in the United States and specific strategies to push its international sales.
It has 110 employees, and this year contracted with Jabil Circuit of St. Petersburg to manufacture all its units. Digital's stock price closed Friday at $3.10. The company ranks 25th on this year's Times list of top-performing public companies.
Digital also has put in place new accounting practices that, Zwan says, will prevent past problems from recurring.
"The facts and circumstances ... associated with that era have all been dealt with quite completely," Zwan said. "We're really a different company than we were four years ago."
As for the turbulent last four years:
To one former SEC attorney, Zwan's penalty seems benign. "If one assumes that 50 percent or even 25 percent of what is alleged is true, a $10,000 settlement to me sounds like a gift," said New York lawyer Jeffrey Plotkin, who reviewed Zwan's deal at the request of the Times. "It sounds to me ... that the SEC, when it got its feet put to the fire, couldn't come up with the goods."
The SEC had hoped to develop Licciardi as a witness against Zwan. The agency interviewed her in 1999 but could not find her as it prepared for trial.
His case, though, resulted in a strong rebuke from Miami lawyer Stanley Beiley, the arbitrator who heard Joseph's complaint.
Digital shareholders should have been told, Beiley wrote, that "senior management knew that Denise Licciardi admitted to significant inventory falsifications and yet rewarded her by permitting her to resign, rather than firing her."
His grand plan for the future: introduce a "worldwide incredible product" by year's end.
"Digital Lightwave," Zwan promises, "has embarked on a whole new reinvention of itself."