Top AOL execs escape prosecution
It look like top AOL executives will escape prosecution for their accounting tricks at the time of merger with Time Warner, The Washington Post reports.
Apparently, federal investigators have run into the five-year statute of limitations before they were able to file charges against top execs. Two mid-level managers are on trial for accounting irregularities, though: Kent Wakefield and John Tuli operated "far from the company's highest ranks."
For the companies that participated in the scam with AOL, though, it's a different story. PurchasePro allegedly worked with AOL to artificially drive up the Internet provider's earnings. In the "round trip accounting" scheme, each company claimed to have paid the other for advertising and other services.
Purchase Pro founder Charles Johnson is on trial in federal court on charges he lied to auditors and shareholders. Half a dozen former employees are expected to testify against him.
The problem at AOL seems to come down to the fact that prosecutors were unable to dig up high-level managers ready to testify against their bosses. "Such assistance was crucial to breaking open complex white-collar investigations of such companies as Enron Corp., WorldCom Inc. and Adelphia Communications Corp.," the Post notes.