IRS charges Mercury Interactive's former CFO with tax evasion

Mercury Interactive Corp.'s former chief financial officer has been charged with tax evasion.

Sharlene P. Abrams, then a resident of Los Gatos, was charged with three counts: one over her personal 2001 tax filing and two for her part in the "false and fraudulent" filings of Amnon Landan, then Mercury's former chief executive, and Kenneth Klein, then its chief operations officer.

Mountain View-based Mercury Interactive eventually paid a $28 million fine to settle a civil complaint by the Securities and Exchange Commission, as well as a payment of $117.5 million to pension funds to settle a class-ation lawsuit over the misdated options.

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Mercury Interactive, which was later acquired by Palo Alto-based Hewlett-Packard Co. (NYSE:HPQ), was one of the first companies cited in connection with manipulation of stock options.

The complaint, filed in U.S. District Court, Northern District of California, said Abrams "orchestrated the backdating of stock option exercise dates for herself, Landan and Klein in order to reduce the income taxes."