- The Washington Times - Tuesday, February 6, 2007

ASSOCIATED PRESS

Two former midlevel executives at America Online were acquitted yesterday on all counts of charges they conspired with a now-defunct Las Vegas software firm to inflate its revenue with secret side deals and backdated contracts.

A third defendant, a senior executive at Las Vegas-based PurchasePro, also was found not guilty on all counts.

The verdicts brought to a close one of the longest trials in the history of the federal courthouse in Alexandria, known as the “rocket docket” for its speed in dispatching even complicated criminal cases. The trial lasted more than three months, but the jury took only two full days of deliberations to reach its verdict.

John Tuli, 39, a former vice president in AOL’s NetBusiness unit; Kent Wakeford, 38, a former executive director at AOL’s business-affairs unit; and Christopher Benyo, 45, a former senior vice president of marketing at PurchasePro, had been accused of conspiracy and abetting stock fraud.

At the time, PurchasePro was leaning heavily on its partnership with AOL to supply revenue; prosecutors said AOL was motivated to assist PurchasePro’s fraud because AOL received a commission every time it helped sell PurchasePro’s core product, a “marketplace license” that supposedly facilitated business-to-business transactions over the Internet.

All three defendants wept with relief when the verdicts were read. Mr. Tuli and Mr. Wakeford, whose defense strategies were at times at cross-purposes, embraced and congratulated each other warmly after the judge formally dismissed the case.

The man accused of being the ringleader of the scheme, outspoken PurchasePro founder Charles “Junior” Johnson, is scheduled to go on trial in August. He had been on trial with the other three defendants, but U.S. District Judge Walter D. Kelley Jr. declared a mistrial in Mr. Johnson’s portion of the case for reasons that remain under seal.

Several PurchasePro executives who already had been convicted and sentenced after striking plea deals testified at the trial about a brazen conspiracy that included forged contracts and destroying evidence of wrongdoing by smashing laptop computers and burying them under the foundation of backyard swimming pools.

During the trial, Mr. Wakeford took the stand in his own defense and testified for more than 18 hours, including cross-examination. He said he raised questions about the PurchasePro deals several times with high-level executives at AOL and was trying to do the right thing.

Mr. Wakeford’s attorney, Henry Asbill, said Mr. Wakeford’s testimony was a turning point in the trial.

Mr. Wakeford said in an interview that he always intended to take the stand, even though criminal defendants are frequently advised against doing so.

“It’s probably one of the most important decisions I’ve made in my life,” he said. “But I’ve lived with this for so long, there was no way I was not going to get up there and tell my side of the story.”

Even though Mr. Wakeford’s defense at times pointed the finger at Mr. Wakeford’s boss, Eric Keller, both Mr. Wakeford and Mr. Asbill said yesterday they do not think anybody at AOL acted illegally in AOL’s dealings with PurchasePro.

AOL eventually ended up paying a large portion of Mr. Wakeford’s legal bills, but he estimated that he still lost more than $1 million over the past four or five years in lost wages, expenses and unreimbursed legal fees defending himself.

He complained that prosecutors were overzealous in pursuing their case, citing testimony of a government witness who said prosecutors pressured her to try to say things she believed untrue.

In a prepared statement, U.S. Attorney Chuck Rosenberg did not specifically address Mr. Wakeford’s accusations but generally defended the work of his prosecutors. “Sometimes, jurors see things in a different way,” he said. “We respect their decision.”

Mr. Tuli’s attorney, Mark Hulkower, said jurors made the right decision. “We’ve known for five years that John Tuli did nothing wrong,” he said.

Mr. Benyo’s attorney, Terrance Reed, said that despite three months of testimony, very little of the government’s evidence pointed at the defendants. In closing arguments, Mr. Reed told the jury that the conspirators at PurchasePro deliberately kept Mr. Benyo out of the loop because they did not trust him to go along.

“The government had their full and fair shot,” Mr. Reed said, citing the extensive investigation and prosecutorial effort.

AOL is now a division of Time Warner Inc., which in December 2004 paid a $210 million fine to settle criminal charges that AOL as a corporate entity aided and abetted stock fraud at PurchasePro.

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