SEC Said To Broaden AOL Investigation
News report says inquiry will be expanded to focus on alleged schemes to inflate online service's revenueMar 12, 2003 | AP
A federal probe of America Online Inc. and key executives will investigate whether the company was "aiding and abetting" schemes by other companies to artificially inflate reported revenue, The Washington Post reported Wednesday.
Securities and Exchange Commission investigators will investigate whether AOL and other companies exchanged cash through sham transactions to inflate their revenue reports, and whether former executives David M. Colburn and Eric Keller were involved, the Post said, quoting unidentified sources.
Attorneys for Colburn and Keller declined to comment, the report said.
The events under investigation allegedly occurred before and after AOL, based in Dulles, Va., merged with Time Warner Inc. in January 2001. AOL Time Warner, based in New York, has said it hopes to avoid criminal charges by cooperating with federal investigators.
The company has reported $190 million in accounting discrepancies and has turned over thousands of documents to investigators. The company is being investigated by the SEC, the FBI and the U.S. attorney's office for the Eastern District of Virginia.