Tags: Media Bias | newsweek | ibt | christian media | fraud scheme

WSJ: Newsweek's Former Parent Charged With Fraud Scheme

Newsweek magazine sites on the shelf with Time and The Economist
(Robert F. Bukaty/AP)

By    |   Wednesday, 10 October 2018 08:49 PM

Newsweek's former parent company has been charged with a scheme to bilk lenders out of millions to keep the struggling media organization afloat, The Wall Street Journal reported Wednesday.

The indictment follows a more than yearlong fraud investigation by the Manhattan District Attorney's Office, which has also been examining possible advertising abuses at IBT Media and its connections to Olivet University, a bible college in California, the Journal reported, citing unnamed sources.

IBT Media owned Newsweek during the period of the alleged fraud, from March 2015 until October 2016. The company said Wednesday it completed a spinoff of Newsweek into a separate entity, the Journal reported.

Prosecutors allege IBT was joined in the fraud scheme by the Christian Media Corp., a faith-based online publisher based in Washington, D.C.

Prosecutors charge that top executives from both companies created phony financial statements — approved by a fictitious auditor — to secure $10 million in loans from three financial institutions, supposedly to buy high-end computer servers.

The money was then laundered through corporate bank accounts and used to support day-to-day operations at the media organization, prosecutors alleged.

In all, IBT got more than $8.6 million in cash through the scheme, prosecutors allege, with the Christian Media Corporation pocketing approximately $1.5 million, the Journal reported.

The loans were ultimately repaid, which means none of the defendants faces grand larceny charges, the Journal reported.

A spokesman for IBT Media had no immediate comment, nor did lawyers for IBT Media and Christian Media, the Journal reported. A spokesman for Olivet University did not immediately return a call seeking comment. Olivet was not accused of wrongdoing.

The 10-count indictment unsealed Wednesday in Manhattan Supreme Court names as defendants IBT Media and its co-founder, Etienne Uzac; Christian Media and its former chief executive and publisher, William Anderson; and computer company Oikos Networks Inc. Lawyers for Uzac and Anderson denied the charges.

Both individuals and all three companies were charged with money laundering, scheming to defraud, falsifying business records, and conspiracy, the Journal reported. Christian Media and Anderson were also charged with contempt for allegedly failing to produce documents that’d been subpoenaed.

The defendants are scheduled to surrender Thursday.

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A scheme to bilk lenders out of millions to keep the struggling media organization afloat has been alleged against Newsweek's former parent company, according to The Wall Street Journal.
newsweek, ibt, christian media, fraud scheme
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2018-49-10
Wednesday, 10 October 2018 08:49 PM
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