- The Washington Times - Thursday, January 13, 2005

A former top executive at America Online Inc. pleaded guilty yesterday in federal court in Virginia to one count of fraud in a kick-back scheme to embezzle more than $2 million from his employer and others.

U.S. Attorney Paul J. McNulty said Gregory S. Horton, 38, of Weston, Fla., entered the guilty plea before U.S. District Judge James C. Cacheris, admitting to one count of wire fraud in connection with his employment with America Online in 2003.

Mr. McNulty said that from November 2002 until August 2003, Horton served as AOL’s executive vice president of human resources in Sterling, Va., reporting directly to AOL’s chief operating officer. He said Horton faces a maximum penalty of 20 years in prison, a $250,000 fine and full restitution. Sentencing is set for April 22.

According to federal prosecutors, Horton engaged in a scheme to defraud not only AOL but also his prior employers, Qwest Communications Inc. in Denver and AutoNation Inc. in Fort Lauderdale, Fla.

Prosecutors said Horton worked at AutoNation from May 1999 until October 2001, at which time he moved to Qwest and remained there until he was hired by AOL. At all three companies, prosecutors said, Horton either had the authority to approve or the ability to influence the hiring of outside consultants to perform services in the area of human resources.

Horton enriched himself at all three companies with funds paid to outside consultants who had been hired to perform services for the companies, prosecutors said.

As part of the scheme, they said, Horton directed the consultants to pay third-party companies that Horton either directly or indirectly controlled.

Court records show that Horton defrauded AutoNation of $1.8 million, Qwest of $333,000 and AOL of $100,000.

The investigation was conducted by the FBI, and was prosecuted by Assistant U.S. Attorney Stephen Learned.

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