Former homestore CEO signs plea
The former chief executive officer of Homestore.com — the predecessor to Westlake Village-based realty Web site Move.com — signed a plea agreement admitting to securities fraud for his alleged role in a scheme designed to artificially inflate the company’s profits.
Westlake Village resident Stuart Wolff admitted to conspiring to artificially inflate Homestore’s public advertising revenue, making the publicly traded company appear more profitable to analysts. The plea agreement, which was filed Jan. 7 in the U.S. District Court in Los Angeles, calls for a sentence of three to five years in federal prison.
Wolff was Homestore’s CEO and chairman from 1997 until he resigned in early 2002. In 2001, he and other company personnel allegedly participated in a scheme to execute fraudulent “round-trip” transactions that generated a circular flow of money in which Homestore recognized its own cash as revenue.
Wolff was convicted of more than a dozen criminal charges in a 2006 trial. Although he was then sentenced to 15 years in federal prison, the Ninth Circuit Court of Appeals went on to reverse that conviction, finding that the judge in the trial should have been recused. The case was sent back to the district court and will be resolved if the judge there accepts the terms of the plea agreement.
Are you a subscriber? If not, sign up today for a four-week FREE trial or subscribe and receive the 2010 Book of Lists free with your purchase.
