The US Securities and Exchange Commission said it has sued PurchasePro’s former CEO Charles Johnson, employees Chris Benyo and Michael Kennedy, and two former AOL executives John Tuli and Kent Wakeford.
The SEC alleges the men participated in a fraudulent scheme to artificially inflate the reported and announced revenues of PurchasePro for the fourth quarter of 2000… and first quarter of 2001.
At the same time, the US Attorneys’ office for the Eastern District of Virginia said the same five men have been indicted on criminal charges of securities fraud and conspiracy to commit securities fraud.
The charges are related to the same claims that AOL was forced to pay $210 million to settle in December. PurchasePro, once a high-flying e-commerce marketplace, went out of business over two years ago.
The allegations include claims that the executives were involved in backdating contracts and faking deals in order to boost PurchasePro’s reported revenue and secure for AOL performance-based warrants for PurchasePro stock.
