Two ex-AOL execs indicted in PurchasePro case

Two former executives at America Online were among six people charged Monday with stock fraud and other offenses as part of the federal government's investigation into illegal accounting practices at AOL.

The other four charged were executives at a defunct Las Vegas software firm called PurchasePro. Prosecutors say the two companies entered into secret deals to help PurchasePro inflate its revenue in early 2001.

Monday's indictment brings to 12 the number of individuals charged during the government's multiyear investigation of AOL and PurchasePro. Six other former PurchasePro executives, including the co-founder, have previously pleaded guilty.

The indictment charges Kent Wakeford, 36, of New York City, former executive director at AOL's business affairs unit, and John Tuli, 37, of Weston, Mass., a former vice president in AOL's NetBusiness unit, with securities fraud, making false statements to auditors and wire fraud.

Wakeford and Tuli are the first two AOL employees to be charged. Court papers released last month indicated that as many as six individuals at AOL may have been involved in the PurchasePro transactions.

U.S. Attorney Paul McNulty said Monday that Wakeford and Tuli are two of the six, and declined to comment on the status of the other four except to say that the investigation continues.

All six defendants were scheduled to make initial court appearances Tuesday.

AOL's corporate parent, Time Warner (TWX), agreed last month to pay $510 million as part of a settlement of government investigations. The government is deferring a criminal case against Time Warner pending the investigation; the charges will be dismissed after two years if Time Warner cooperates and fulfills other terms of the settlement.

Source: Agencies(condensed)