Compaq files suit to claim $20 m

HOUSTON: Compaq Computer Corp. on Wednesday said that it had filed suit

against the principals of Millennium Technology Group Inc. and Creative

Resources Group seeking to recover more than $20 million that Compaq alleges was

defrauded from it through illegal brokering.

The suit, filed in the United States District Court for the Eastern District

of Virginia in Alexandria, names Harry Martin and Shafiq Ahmad, principles of

Millennium, and Creative Resources Group and its president, Stephen Pridemore,

as defendants.

Houston-based Compaq said its complaint alleges that the defendants sought to

defraud Compaq into paying millions of dollars in unearned rebates and special

marketing support funds. Millennium Technology Group, Martin, Ahmad, Creative

Resources Group and Pridemore couldn't immediately be reached to comment.

According to the suit, the defendants told Compaq that they had large US

government contracts that required significant rebates and discounts from

Compaq. But no such contracts existed with the US government agencies, Compaq

said.

Instead, Compaq alleges, the defendants collected payments from Compaq and

then diverted Compaq products into the brokering market.

"Compaq is committed to ensuring the integrity of Compaq products and

protecting its customers and authorized distribution channels," said Thomas

C. Siekman, senior vice president and general counsel, Compaq Computer

Corporation.

Compaq said it is seeking compensatory damages of more than $20 million as

well as interest, costs, and attorneys' fees.

(C) Reuters Limited 2001.