By Chris Bucholtz

The sad Entellium affair reached a milestone last Friday when Paul Johnston was sentenced to three years in jail and Parrish Jones to two years (plus restitution, plus time spent serving in a community soup kitchen). The full story, as penned by John Cook, can be found here, but the full extent of the catastrophe these two visited upon their customers, investors and employees is greater than we assumed. John writes:

Not helping matters was the revelation by (U.S. Attorney Carl) Blackstone that Entellium had received a buyout offer for more than $100 million from Intuit, the software giant that ended up buying the Entellium assets for pennies on the dollar in bankruptcy proceedings earlier this year.

The initial deal was scrapped in part because executives were worried that research by Intuit would bring the fraud to light, with Blackstone saying the company may be alive today had the executives done the right thing early on. He said Johnston and Jones just didn’t have “the guts to do what was right.”

Ugh. So not only were Entellium’s investors ripped off of their money, their opportunity to profit in spite of that was scotched by Johnston and Jones’ fears caused by the initial fraud. They also put their customers through the wringer unneccarily, and they managed to chuck their employees into unemployment at the least opportune time in years. I suspect there are many in the Seattle area who were hoping for longer terms of incarceration for this pair.