Eight staffers accused of inflating revenue figures
The Securities and Exchange Commission has charged eight former execs at the conglom formerly known as AOL Time Warner with fraudulently inflating ad revenue figures by as much as $1 billion from 2002 to 2005.The alleged scam, which took place from 2000-02, involved bogus transactions that continued to taint earnings through 2005, the government alleges. Four of the defendants have reached settlements that involved neither admitting nor denying guilt. The four are David Colburn, Eric Keller and Jay Rappaport, all of business affairs, and former controller James MacGuidwin. Under the deals, Colburn agreed to pay nearly $4 million, Keller nearly $1 million, MacGuidwin $2.4 million and Rappaport almost $750,000, the SEC said. Colburn and MacGuidwin were also barred from serving as officers or directors of a public company for 10 and seven years, respectively. Contesting the charges are John Michael Kelly, former chief financial officer of the conglom; Steven Rindner, a former biz-affairs exec; Joseph Ripp, former CFO of the AOL division; and Mark Wovsaniker, former head of accounting policy. The SEC aims to disgorge the ill-gotten gains and seek civil monetary penalties from each of them. The latest chapter follows a lengthier saga stemming from the ill-fated merger of Time Warner with AOL. The conglom agreed in 2004 and early 2005 to pay $300 million in a settlement of civil fraud charges with the SEC and $210 million over criminal securities claims by the Justice Dept. Time Warner also restated three years of financial results and opened its books to an independent examiner.