LOS ANGELES — Court was not in session here Tuesday in the trial of former Homestore CEO Stuart Wolff, who faces criminal allegations of securities fraud and illegal insider trading of the company’s stock.

The trial was delayed unexpectedly because one of the jurors has contracted chickenpox, according to Michael R. Wilner, an assistant U.S. attorney, who is one of the government prosecutors on the case.

Judge Percy Anderson announced the juror’s illness in the courtroom this morning. The trial, which opened March 28 and was expected to take two or three months, has been delayed for at least one week.

The judge ordered the attorneys to appear in court Monday afternoon for an update on the status of the trial, and the jurors have been instructed to return next Tuesday, when it is presumed that the trial will resume, unless one or more other jurors also become ill or other unforeseen circumstances warrant a further delay.

Chickenpox, also known as “varicella,” is a herpes-type virus that is usually mild, but can be dangerous and even deadly, according to information posted on the Centers for Disease Control and Prevention Web site. Symptoms include a low fever and a skin rash of itchy blister-like lesions that appear mainly on the patient’s face, scalp or chest. The disease can be transmitted though coughing and sneezing and is highly contagious.

The delay in the trial interrupted the testimony of former Homestore CFO Joseph Shew, who pleaded guilty to securities fraud and wire fraud charges in October 2002 and agreed to repay more than $1 million to the benefit of the company’s shareholders. Shew joined Homestore as controller in August 1998, was promoted to vice president, finance in January 1999 and CFO a month later. He resigned in December 2001, two weeks before the company announced a material restatement of its financial results.

A number of casual observers who arrived late at the courthouse this morning found a deserted hallway and an empty and locked courtroom.

Federal prosecutors have also called Clayton Chan, former senior vice president of Homestore’s Strategic Alliances Group; 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.

Marcie Geffner is a real estate reporter in Los Angeles.


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