A judge has denied former Homestore.com Chairman and Chief Executive Officer Stuart Wolff’s motion for an evidentiary hearing before he is retried on fraud charges, clearing the way for the long-delayed retrial to begin Jan. 26.
Wolff was convicted of fraud and sentenced to 15 years in prison in 2006 for his alleged role in circular transactions that artificially inflated Realtor.com operator Homestore’s revenue in 2001.
Homestore rebranded as Move Inc. after several other company executives were convicted of violating securities law or settled charges with the U.S. Securities and Exchange Commission (SEC). Homestore also paid $13 million in cash and forfeited 20 million shares of company stock to settle a civil suit by investors.
But Wolff’s conviction was vacated in 2008, when an appeals court found that the judge presiding over his first trial should have disqualified himself because he owned stock in America Online, a company that allegedly served as a third-party intermediary in some of the deals (see story).
Wolff has hired a new defense team for his retrial, which maintains that employees of Homestore’s accounting firm, PricewaterhouseCoopers, modified or destroyed evidence in the case.
Wolff’s lawyers claim he went into his first trial without evidence that could have aided in his defense. A review of electronic documents obtained by Wolff’s defense team after his first trial showed many were altered by PricewaterhouseCoopers after the fact, his lawyers alleged in an Oct. 23 motion.
PricewaterhouseCoopers has denied allegations its employees acted improperly, saying the company "complied with professional standards in connection with our services to Homestore."
After interviewing three PricewaterhouseCoopers employees about the allegations, government prosecutors acknowledged "inconsistencies" in their statements and in records kept by the accounting firm.
Prosecutors said there appeared to be "benign explanations" for those inconsistencies, such as the length of time that has passed since the events in question, but acknowledged that Wolff’s defense team would be able to call into question the credibility of PricewaterhouseCoopers’ records and employees. …CONTINUED