The Manhattan Prosecutor's Office seized 18 computer servers from the headquarters of Newsweek magazine in Lower Manhattan on January 18, 2018. On Friday, two Manhattan Criminal Court executives were found guilty of fraud and money laundering during the raid.
Etienne Uzac, a former co-owner of IBT Media, the former owner of Newsweek, and William Anderson, a former managing director of Christian Media, both pleaded guilty to indicting every charge, said Manhattan District Attorney Cyrus R. Vance Jr.
The pleas followed a year-long investigation into the relationship between IBT Media and David Jang, a South Korean pastor, and Olivet University, a small Bible school he founded in Southern California.
Mr. Vance and a team of investigators, including members of the Major Economics Crimes Bureau, uncovered misrepresentations of Newsweek's finances, including a fictitious accounting firm called Karen Smith L.L.P. belonged. Money allegedly borrowed for office equipment was used for other purposes according to the fees.
Newsweek journalists, including two top editors and a reporter, were fired in 2018 after addressing IBT Media's financial affairs and legal issues in the weeks following the raid. Several others stepped down. The prosecutor filed criminal charges against Mr. Uzac and Mr. Anderson in October 2018, accusing them of millions of dollars in fraud and a money laundering conspiracy.
The charges also included IBT Media, which Newsweek bought from IAC / InterActive in 2013. IBT Media pleaded guilty on Tuesday and agreed to lose $ 30,000.
In a statement on Friday, Mr. Vance called the crime "a massive fraud program whereby a group of sophisticated criminals illegally moved tens of millions through our Manhattan market by brazenly overrating the financial health of their businesses."
The lawyers of Mr. Uzac, Mr. Anderson and IBT Media did not immediately respond to requests for comments.
Newsweek was founded in 1933 as a weekly newspaper against Henry Luces Time. In 1961 it was bought by the Washington Post Company. At its peak 30 years later, it had a circulation of more than 3.3 million. In 2007 it had 10 international offices.
In 2010, the Washington Post Company outsourced it to billionaire Sidney Harman for $ 1, who also assumed $ 40 million in liabilities. He merged it with The Daily Beast, the IAC web publication. Newsweek was sold to IBT Media at an undisclosed price.
The trial of Mr. Uzac and Mr. Anderson is scheduled for April 20.