Thursday, October 11, 2018
Former Newsweek Owner Accused of Fraud in Manhattan Indictment
The former owner of Newsweek magazine, and a faith-based online media company, have been accused of attempting to defraud lenders in an indictment filed in Manhattan on Wednesday.
According to the New York Times, IBT Media and Christian Media Corporation are accused of borrowing money on the pretense of purchasing computing services through a company called Oikos Networks, then diverting most of the funds back to the companies. And the Wall Street Journal reports that much of this money was used to keep Newsweek afloat.
IBT co-founder Etienne Uzac, and former Christian Media CEO and Publisher William Anderson, are accused of misrepresenting the financial health of Newsweek though faked financial documents. Prosecutors said the fakery included the creation of a fake accounting firm. Oikos, meanwhile, is accused of providing low-quality computer equipment, the value of which was then inflated on invoices.
In a statement posted to Twitter, Uzac denied the charges and called them “retaliation for having uncovered that the Manhattan District Attorney Cy Vance Jr. declined to press charges against Harvey Weinstein after his attorney paid Vance money.”
Uzac also says that the lenders have been fully repaid, and are not pressing charges against him, calling the indictment “a clear case of government power abuse.”
In a statement provided to the Times, Anderson’s lawyer also denied the charges, saying that “the notion that my client has engaged in conspiratorial or money-laundering behavior is absurd.”
Anderson and Uzac are set to be arraigned Thursday.
In a statement Wednesday night, Newsweek announced that Newsweek Media Group had been split into two companies, IBT Media, and Newsweek. “Ownership of IBT Media will remain with CEO Johnathan Davis and Etienne Uzac,” the statement reads. “Neither Davis, a Newsweek shareholder, or Uzac have operational roles at Newsweek.”
The Mahattan DA’s office raided Newsweek Media Group offices in January as part of the investigation leading to Wednesday’s indictment. On Feb. 20, Newsweek published a story about the investigation, credited to reporters Celeste Katz, Josh Saul and Josh Keefe. The article included a blistering editor’s note that accused the parent company of repeatedly breaching confidentiality and journalistic ethics in an attempt to kill the story, then firing Katz, along with editors Bob Roe and Ken Li, in retaliation after it was published. Other Newsweek staff resigned soon after.
Representatives for Newsweek, Uzac and Anderson did not immediately respond to requests from TheWrap for further comment.