Former L90 officer charged with fraud
Associated Press
LOS ANGELES - The former chief financial officer of an Internet advertising firm faces civil and criminal charges that he participated in a scheme to inflate revenues to meet stock analysts' expectations, federal prosecutors said.
The Securities and Exchange Commission filed civil charges Thursday against Thomas A. Sebastian, alleging the former CFO of L90 Inc. lied to his company's auditors and engaged in fraud by helping the company engage in a series of advertising barter transactions with other Internet companies.
Sebastian also faces federal criminal charges of securities fraud.
Sebastian is the fifth former L90 official to be charged by the SEC and the fourth to face criminal charges.
Prosecutors said the company, through its subsidiary, webMillion.com, engaged in a number of barter transactions for advertising with other companies, then swapped checks for the supposed value of the ads. The incoming checks were booked as revenue without disclosing that they were from barter transactions.
Prosecutors said the company often channeled the checks through a third party to hide the sham from auditors and investors.
Federal officials said the ruse resulted in L90 inflating revenues by $4.3 million from the third quarter of 2000 through the third quarter of 2001.
Sebastian, 39, a Virginia resident, was L90's CFO from July 1999 until he was placed on administrative leave in 2002. He resigned in March, 2002, according to a press release issued by the SEC, the U.S. attorney's office and the FBI.
A call placed to Sebastian's attorney was not immediately returned Thursday.
The SEC is seeking a permanent injunction barring Sebastian from serving as an officer or director of a public company, plus disgorgement and civil penalties.
The criminal complaint carries a maximum penalty of five years imprisonment.
Sebastian will be summoned to appear in court Oct. 21.
The four former L90 officers charged in the case previously agreed to settle the charges without admitting or denying guilt. |
