WebProNews

Former AOL Time Warner CFO John Michael Kelly and seven other people were charged by the Securities and Exchange Commission with causing the overstatement of ad revenue by over a billion dollars.

While four of the former executives paid off settlements with the SEC to escape its clutches without admitting or denying anything, four more intend to battle back against the Feds.

The Wall Street Journal said Kelly, Joseph Ripp, Steven Rindner, and Mark Wovsaniker could be fined and barred from working as directors or officers of publicly traded companies, as the SEC seeks to punish them for their deeds in the wake of the disastrous Time Warner/AOL merger.

In a litigation release from the SEC, the SEC alleged that from at least mid-2000 to mid-2002, the quartet "engineered, oversaw, and executed fraudulent round-trip transactions in which AOL Time Warner effectively funded its own advertising revenue by giving purchasers the money to buy online advertising that they did not want or need."

"Kelly and Wovsaniker, both certified public accountants, also are charged with misleading the company's external auditor about the fraudulent transactions," the statement continued.

The Journal reported Kelly, Wovsaniker, and Ridner plan to contest the charges. Wovsaniker's attorney countered the claims by stating his client "actively sought to prevent improper conduct by others and that various persons acted contrary to his instructions." Wovsaniker has also been called as a federal witness in several related cases.

Of the four who settled with the SEC, PaidContent noted how "former controller James MacGuidwin will return $2.1 million and pay a $300,000 penalty; David Colburn, the former head of the business affairs unit, has agreed to pay $3.2 million back and has accepted $750,000 penalty." The other two former executives have not been named.