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SAN FRANCISCO — Federal authorities on Tuesday accused two former Critical Path Inc. executives of fabricating sales in 2000, an accounting scandal that nearly ruined the once high-flying e-mail provider. 

Investors have known about Critical Path’s accounting chicanery for nearly a year, but Tuesday’s complaints filed by the Securities and Exchange Commission and U.S. Attorney’s office provided the first details of the deceit. 

The criminal and civil complaints filed against David A. Thatcher and Timothy J. Ganley paint an unflattering portrait of corporate accounting practices amid growing investor jitters about financial deception following Enron Corp.’s collapse. The Houston-based energy trader went bankrupt after admitting it concealed massive losses. 

San Francisco-based Critical Path’s shenanigans look small compared with the Enron debacle. 

But federal authorities allege Critical Path’s financial misconduct grew from the same manic desire to please Wall Street and drive up the company’s stock price. 

Critical Path’s fiasco wiped out billions in shareholders’ wealth. 

After Critical Path released its first misleading financial statement in October 2000, the company was worth $3.8 billion. By the time the company restated its results in April 2001, its market value had plummeted 97 percent to $114 million.  

Thatcher, formerly Critical Path’s president and chief financial officer, and Ganley, formerly the company’s vice president of strategic sales, have already settled the civil complaint filed by the SEC. 

Now living in Southern California, Thatcher, 47, agreed to pay a $110,000 fine and will be barred from working as an executive or director at a publicly held company for five years. Ganley, 45, will pay $105,900 in penalties. 

Both men still face criminal charges filed by the U.S. Attorney’s office. 

Thatcher “is looking forward to taking responsibility for his actions and moving forward with his life,” said his attorney, Nanci Clarence. She said her client is cooperating in the SEC’s continuing investigation into Critical Path’s accounting scandal. 

Efforts to reach Ganley were unsuccessful Tuesday. 

Critical Path won’t be fined as part of an administrative settlement with the SEC. Without admitting wrongdoing, Critical Path conceded its 2000 results were misleading. 

The company is trying to bounce back under a new CEO, venture capitalist and turnaround specialist William McGlashan Jr. Since April, Critical Path has closed nearly 50 offices, lowered its debt from $300 million to $38 million and cuts its operating expenses in half, partly by jettisoning nearly 500 workers. 

The company, which lost $79.8 million on revenue of $104 million last year, remains a Wall Street outcast. All 17 securities analysts that once followed the company have dropped their coverage in the wake of the accounting scandal. 

McGlashan said he will try to persuade analysts to resume coverage during the next six weeks. 

Tuesday’s legal action rehashed the events that landed the company in hot water. 

Authorities allege Thatcher orchestrated schemes to falsify the company’s revenue during the final half of 2000 to live up to Wall Street expectations. Management tantalized investors by promising steadily rising revenue after the e-mail provider’s sales soared during the dot-com boom of early 2000. 

In his desperation, Thatcher ordered Critical Path’s sales force to book bogus sales to customers who couldn’t afford to pay and, in at least one instance, doctored an e-mail to dupe the company’s auditors, authorities allege. 

The SEC said it identified eight “fictitious” or otherwise suspect transactions totaling $10.8 million during 2000. Before revising its 2000 results 10 months ago, Critical Path initially reported 2000 sales of $155 million. 

Ganley is accused of helping Thatcher book sales to customers who couldn’t afford to pay for the company’s software. The complaints also allege Ganley illegally sold 1,300 shares of Critical Path stock for $31,881, or an average of $24.52 per share, to pad his pockets before the accounting fraud was uncovered. 

After a February 2001 announcement disclosing Critical Path had launched an internal investigation into its accounting practices, the company’s shares plunged 70 percent, falling from $10.06 to $3.06. 

Critical Path’s shares fell 34 cents Tuesday to close at $2.58 on the Nasdaq Stock Market. The stock, which peaked at $134.88 in 1999, has traded for as low as 24 cents during the past year. 

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