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Newsweek's former parent company charged in $10M fraud scheme: report

Newsweek's former parent company charged in $10M fraud scheme: report
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Manhattan prosecutors have charged Newsweek’s former parent company, IBT Media, with carrying out a plot to defraud lenders out of millions of dollars as it struggles to remain profitable.

The indictment is part of a fraud probe run by the Manhattan district attorney’s office that has lasted over a year and also examines possible advertising abuses and its connections to Olivet University, a Christian institution in California, people briefed on the investigation told The Wall Street Journal

Prosecutors claim that Christian Media Corporation, a faith-based online publisher based in Washington, was also involved in the scheme, which reportedly lasted from March 2015 until October 2016.

IBT Media owned Newsweek at the time of the alleged fraud. Newsweek became independent of IBT Media last month. 

 

The companies are accused of falsifying financial statements in order to secure approximately $10 million in loans to buy high end computer servers, money which was then laundered to fund day-to-day operations, prosecutors told the Journal. 

The 10-count indictment unsealed Wednesday in Manhattan Supreme Court names as defendants IBT Media and its co-founder, Etienne Uzac; the Christian Media Corporation and its former chief executive and publisher, William Anderson; and a computer company called Oikos Networks, Inc.

The specific charges include money laundering, scheming to defraud falsifying business records and conspiracy.

The defendants are scheduled to surrender to authorities Thursday and will be arraigned that afternoon.

“It is disturbing that the Manhattan DA’s office is once again trying to make a case where no victim suffered any financial harm,” Andy Lankler, a lawyer for Anderson, told The Wall Street Journal. “The notion that my client intended to deceive anyone, much less engage in a money laundering conspiracy, is absurd. We will vigorously defend these charges.”

-- Updated 8:06 p.m.