Media company Time Warner Inc. has agreed to pay the U.S. government $210 million to settle charges that its America Online unit fraudulently inflated its revenue figures, court documents showed on Wednesday. Separately, Time Warner is expected to pay about $300 million to settle civil charges with the Securities and Exchange Commission related to its buyout of a stake held by Germanys Bertelsmann AGin AOL Europe, a source familiar with that matter said. The company has already set up a reserve to cover anticipated costs of the settlements.
The $210 million payment is part of a deal to settle criminal charges of aiding and abetting securities fraud. Also in the agreement filed a federal court in Virginia, AOL accepted responsibility for conduct of its employees that led to the criminal violations and agreed to cooperate fully with the Justice Department in its investigation of those people. In exchange, the government agreed to defer prosecution of the company for 24 months, when it will dismiss charges if AOL had followed terms of the deal.
News source: reuters.com