The Avant! Saga: Does Crime Pay?

In early 1993, at a team-building exercise at the posh Claremont Hotel in Berkeley, Calif., executives from software maker Cadence Design Systems Inc. (CDN ) were asked to draw an image that described themselves. While many people pondered what to draw, division president Gerry Hsu--a talented artist, according to two attendees--quickly dashed off a picture of a big, powerful bird flying off into the distance, droppings falling all the way. "I always know where I'm going, and I get there very fast," he explained at the time, "but I tend to leave a trail of s--- behind me."

Who could have predicted he would leave behind this much of it? Since departing Cadence for Avant! Corp. (AVNT ) (pronounced Avanti) in 1994, Hsu has transformed the tiny software boutique from a $2 million-a-year startup into a roaring profit machine that earned $70.9 million on sales of $358 million in 2000. But now the hard-driving Taiwan native, who used to have an apartment next to his office so he could work around the clock, has helped to create a mess of historic proportions. On May 22, Hsu and five top managers pleaded no contest to charges that they conspired to steal Cadence software. He's been fined $2.7 million, and four other top Avant! executives are headed to jail. Meanwhile, the company has been struggling to come up with enough cash to pay $230 million in additional criminal penalties. It is also facing a potentially crippling civil suit by Cadence. From May 21 to Aug. 22, the share price has tumbled from $18.55 to $7.55.