somebody cut a deal for himself!
Former Charter exec pleads guilty to conspiracy-US
July 25, 2003 3:16:00 PM ET
WASHINGTON, July 25 (Reuters) - A former Charter Communications Inc. (CHTR) executive, David McCall, pleaded guilty on Friday to a charge he helped scheme to falsely boost the cable operator's subscriber numbers, a U.S. government official said.
McCall served as a senior vice president at the No. 3 cable company and was indicted on a charge of conspiracy to commit wire fraud for his role in a 2001 ploy to boost the numbers by not disconnecting subscribers or not removing them from the books until after a reporting period had ended.
"Mr. McCall acknowledged in court today that he participated in a conspiracy to defraud Charter stockholders," U.S. Attorney Raymond Gruender in St. Louis said in a statement. "We are very pleased to obtain his cooperation as we proceed with this prosecution."
Charter's former Chief Financial Officer Kent Kalkwarf and former Chief Operating Officer David Barford were indicted on Thursday on charges of artificially boosting the company's operating cash flow and revenue as well as subscriber numbers.
Former Charter Senior Vice President James Smith was also indicted in the scheme involving false subscriber numbers. Lawyers for Kalkwarf, Barford and Smith have said their clients are innocent of the charges.
Charter, which is controlled by Microsoft co-founder Paul Allen, ended up releasing inflated subscriber figures to investors for three quarters in 2001, according to the indictment.
McCall could face up to five years in jail and a $250,000 fine. His lawyer David Harlan declined to comment.
Securities regulators have been investigating Charter's books for months and the company has disclosed that it had overstated revenue and cash flow for 2000, 2001 and the first three quarters of 2002.
The company was ultimately forced to borrow $300 million from Allen, who serves as the company's chairman, to meet its credit arrangements.
Shares of St. Louis-based Charter were down 5 cents, or 1.05 percent, to $4.73 in afternoon trading on the New York Stock Exchange. REUTERS |
