Many people, especially in West Flanders, were blinded by the company's success and lost large sums of money on Lernout & Hauspie stock. The Flanders regional government became a major Lernout & Hauspie investor through a venture capital arm. During one of Lernout & Hauspie's cash shortages, it guaranteed 75% of a bank loan to the company. Investors and taxpayers alike were hit hard when the company went bankrupt. While Pol Hauspie pleaded guilty, Jo Lernout denied any wrongdoing, claiming that the company has been a victim of a "CIA conspiracy". On September 20, 2010, co-founders Jo Lernout and Pol Hauspie, as well as Nico Willaert, former vice chairman, and Gaston Bastiaens, former chief executive officer, were each sentenced to five years prison (of which three years effective and two years probationary) for fraud by the Ghent Court of Appeals. In September 2012 Jo Lernout began a one-year sentence of house arrest with an electronic ankle bracelet.