AOL ‘fraud’ scandal indictments
p2pnet.net News:- Two ex-AOL.officials and four former executives of business partner PurchasePro.com have been indicted on conspiracy and fraud charges linked to an alleged scheme between the two Net companies to, “prop up each other’s financial results just as the dot-com market was beginning to collapse,” says the Washington Post.
“The 31-count indictment accuses the executives of inflating revenue and lying to investors about the true nature of the companies’ financial results,” it says. “According to court documents, some of the executives forged and back-dated contracts and lied to auditors – and then attempted to cover up the scheme by destroying documents and e-mails and lying to federal authorities.”
SomePurchasePro.com executives collected millions in bonuses and stock options, say indictments that follow AOL parent Time Warner’s decision to pay $510 million to settle criminal and civil charges stemming from an AOL accounting scandal, including dealings with PurchasePro, says the Post.
“Time Warner did not admit or deny wrongdoing, and it said it would restate hundreds of millions of dollars in revenue. The deal, however, did not protect current or former employees from prosecution.”
Kent D. Wakeford, a former executive director in AOL’s business affairs unit, and John P. Tuli, vp in its Netbusiness unit, become the first two former AOL employees to be charged in the probe, which began more than two years ago and includes the FBI, the U.S. attorney’s office for the Eastern District of Virginia in Alexandria, and the Securities and Exchange Commission, says the Washington Post.
Also indicted yesterday was Charles E. Johnson Jr., “the flamboyant former PurchasePro chief executive and chairman who got his start in business by operating a gym and video stores,” according to the article, which goes on:
“Contacted yesterday, Yale L. Galanter, Johnson’s attorney, said he had time to give the indictment only a brief look. ‘Junior is a corporate American hero,’ he said, because Johnson ‘put every dime’ he had into PurchasePro and ‘walked away with nothing’.”
Other ex-PurchasePro employees indicted yesterday were Christopher J. Benyo, former senior vp of marketing; Joseph Michael Kennedy, former senior vp and cto; and Scott E. Wiegand, former senior vp and general counsel.
“This is a very active, ongoing investigation,” US attorney Paul J. McNulty is quoted as saying. “We will take the time to work through all the records to try to find the truth behind the numbers.”
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See:-
conspiracy and fraud – 6 Indicted in AOL Accounting Case, Washington Post, January 11, 2005
$510 million – Time Warner AOL troubles, p2pnet, November 3, 2004
