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Thursday, Mar 28, 2024

Former Homestore CEO Sentenced to 15 Years

Stuart Wolff, the former CEO of Homestore.com, was sentenced in Los Angeles today to 15 years in federal prison for his role in inflating the company’s revenues in an attempt to make the company appear more profitable to Wall Street. Wolff was also ordered to pay a $5 million fine. In June, a jury found Wolff guilty of 18 counts of conspiracy, insider trading, making false reports to the Securities and Exchange Commission, falsifying corporate records and lying to company auditors after a three-month trial. The charges involved a scheme to inflate revenues by overpaying vendors for goods and services with the understanding that the overpayments would be directed back to the company in advertising contracts, according to the prosecutors. Wolff was the eleventh former Homestore employee to be convicted or take a plea in connection with the scheme. He resigned in 2002 as an internal probe began uncovering the problems. According to the U.S. Attorney’s office, shareholders suffered losses of at least $100 million when news of the investigation became public and the company’s stock price dropped dramatically. Westlake Village-based Homestore has since changed its name and business model and is now known as Move.com. Wolff’s attorneys have said they plan to appeal the conviction. A hearing on whether Wolff can remain free on bail pending the appeal is scheduled for Nov. 13.

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