This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

U.S. Confirms Homestore Pleas

Updated from 9:08 a.m. EDT

Three former executives of (HOMS) will plead guilty to criminal fraud charges related to questionable bookkeeping at the Web site, in a move that could have implications for AOL Time Warner (AOL).

The ex-chief financial officer, chief operating officer and a director of finance for Homestore will plead guilty to a variety of charges and to cooperate with the government's investigation into Homestore and its business partners, federal officials said.

Former chief operating officer John Giesecke and former chief financial officer Joseph Shew will be charged with conspiracy to commit securities fraud in a criminal information to be filed in Los Angeles. The information will also charge Giesecke with wire fraud and former vice president John DeSimone with insider trading, officials said.

The Wall Street Journal cited people familiar with the plea bargain who say the executives will claim Homestore paid about $50 million to third-party companies for software and other goods in early 2001, then allegedly required those companies to buy about $45 million of ads from AOL. Since AOL had promised to buy ads on Homestore if Homestore referred advertisers to AOL, the company was then able to recognize more than $35 million in revenue from AOL -- essentially converting cash on its balance sheet into revenue, a violation of generally accepted accounting.

America Online says it's cooperating with investigators and wouldn't comment further. America Online's accounting for certain advertising transactions is under investigation by the Securities and Exchange Commission and the U.S. attorney's office in Alexandria, Va.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
HOMS $0.34 -2.86%
AOL $0.00 0.00%
AAPL $95.18 1.64%
FB $117.43 -0.96%
GOOG $692.36 -0.84%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs