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Newsweek magazine, once the powerful media, was at the center of a multi-million dollar fraud and money laundering scheme, according to a charge brought by Manhattan prosecutors and unsealed on Wednesday.
Two publishing houses, IBT Media, owner of the magazine, and Christian Media, a Washington-based online publisher, have been accused of attempting to defraud lenders by claiming to have borrowed money. for sophisticated IT services.
Instead, most of the money was channeled to accounts controlled by both media companies and their executives – Etienne Uzac, co-founder of IBT, and William Anderson, former managing director and publisher of Christian Media – and unnamed co-conspirators, the indictment says. Part of this money would have been used to cover the running costs of the magazine.
The men were accused of misinterpreting Newsweek's financial health and having created a fictional accounting firm, Karen Smith LLP, accompanied by a series of fictitious financial statements prompting lenders to fool sums that would have cost millions of dollars in 2015 and 2016. also named in the indictment, accused of providing fewer computers of lower quality than those who cost on the bills.
The Manhattan District Attorney's Office laid the charges following a lengthy investigation into corporate financial transactions, which included a raid on the IBT offices in Manhattan in January. The best editors and journalists of Newsweek were fired after they also began to search the company's accounts and the owners' links with Olivet University, an evangelical Christian university in New York. Several other magazine employees soon resigned.
Mr Uzac defended himself Wednesday on the IBT website, accusing Manhattan district attorney Cyrus R. Vance Jr. of retaliation against his news agency for reporting the incident. Last fall an electoral contribution from the lawyer Harvey Weinstein, the powerful film producer.
Mr. Uzac added, "The subsequent fire storm seriously damaged the DA's office, led the New York Attorney General to investigate his office and almost cost him his re-election."
In May, Mr. Vance brought charges of rape and criminal sexual acts against Mr. Weinstein in cases involving two women.
Uzac's lawyer, Marc A. Agnifilo, said in a statement that his client "firmly denies these baseless accusations".
"It is undeniable that no one has lost money," he added. "We maintain that no one has been cheated and that the record of D.A. is invented, false and will be firmly repudiated."
Anderson's lawyer, Andrew Lanker, denied that his client had committed wrongdoing.
"We are concerned that once again, the Manhattan District Attorney's Office initiated a proceeding in which the victim suffered no financial harm. It's an abacus again, "he said. this resulted in the acquittal of two bank managers.
"The idea that my client had a conspiratorial or money laundering behavior is absurd," Lanker added. "We will vigorously defend these accusations."
IBT bought Newsweek in 2013. Last year, the company changed its name and now calls itself Newsweek Media Group.
After the revelation of the indictment Wednesday afternoon, the magazine announced that Newsweek Media Group had split into two separate companies – Newsweek, which controls the print and digital versions, and IBT Media, which runs the International Business Times, Fashion Times Medical Daily and other publications.
Uzac and Anderson should be brought to court Thursday.
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