Clayton Chan, 39, of San Francisco, testified in U.S. District Court in Los Angeles on Tuesday in the ongoing criminal trial of Stuart Wolff, former Homestore CEO.

Chan, who was the vice president of Homestore’s Strategic Alliances Group from January 2001 to July 2001 and was later promoted to senior vice president of the group, is the sixth person called to testify in the trial, which began March 30. Federal prosecutors are attempting to prove that Wolff participated in a fraudulent scheme to artificially inflate revenues at Homestore and deceive investors.

Federal prosecutors have also called Mark Rowen, an employee at Prudential Equity Group; Rosalind Tyson, associate regional director for regulation at the SEC office in Southern California; John Giesecke, Homestore’ former CFO and COO; Sailesh Patel, who served as director of business development at Homestore from August 2000 to October 2001; and Geoffrey Infeld, a former salesman for Homestore’s Strategic Alliances Group; to serve as witnesses in the trial.

In September 2004, the U.S. Securities and Exchange Commission, along with the FBI and U.S. Attorney’s Office, announced that Chan, who the SEC had charged with violating numerous federal securities laws related to his employment at Homestore, agreed to plead guilty to securities fraud and cooperate with the government in ongoing investigations. In the settlement agreement, Chan also agreed to repay about $180,000 in profits from his exercise of Homestore stock options and commissions and to pay a $50,000 civil penalty.

The federal agencies also announced in September 2004 that Infeld agreed to plead guilty to one count of wire fraud in connection with the SEC investigation, would repay about $17,400 related to profits from a fraudulent transaction with Homestore, plus interest, and would pay a civil penalty of $35,000.

In September 2003, the agencies announced that Patel and others agreed to plead guilty to criminal charges in the matter, to settle a lawsuit by the SEC and to cooperate in ongoing investigations. Patel agreed to pay $170,800 related to “improper kickbacks he received from customers, interest and a civil penalty,” according to the announcement. Giesecke and others had earlier pleaded guilty to criminal charges.

The SEC and U.S. Justice Department in April 2005 announced criminal and civil cases against Wolff and Peter Tafeen, the company’s former executive vice president of business development. In early March, shortly before the trial against the duo was expected to begin, the U.S. Attorney’s Office for the Central District of California announced that Tafeen had agreed to settle the charges against him by pleading guilty to one count of securities fraud and agreeing to testify against Wolff. Tafeen faces a maximum sentence of 10 years in federal prison for securities fraud.

Brian J. Hennigan, a lawyer who is representing Tafeen, said Tuesday that he has not received any word on when Tafeen may be called to testify at the trial. Tafeen has not attended any of the court proceedings involving Wolff, he also said.

So far, 10 former Homestore employees have pleaded guilty to criminal charges related to the fraudulent transactions that inflated Homestore revenues. In these deals, federal prosecutors have said that Homestore and other companies generated a circular flow of money through so-called “round-trip” transactions that Homestore officials fraudulently counted as revenue.

Wolff faces charges that he participated in a criminal conspiracy to commit securities fraud, file false financial reports, falsify the company’s financial records, mislead accountants about the true nature of the company’s finances and engage in illegal insider trading.

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