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Ex-Exec of Homestore Pleads Guilty

October 30, 2002|From Associated Press

A former vice president at Homestore Inc., the online real estate technology company, faces up to 10 years in prison after pleading guilty to a federal insider trading charge.

John Desimone entered the plea Monday and is expected to be sentenced April 21 by U.S. District Judge Percy Anderson.

Two other former Homestore executives pleaded guilty this month to federal charges for their role in a scheme to inflate the company's earnings.

John Giesecke Jr., former chief operating officer, and Joseph J. Shew, former chief financial officer, pleaded guilty to conspiracy to commit securities fraud. Giesecke also pleaded guilty to wire fraud.

The two were among seven executives who quit or were fired after the plot came to light late last year.

Giesecke faces up to 10 years in prison and Shew as much as five years. Both are scheduled to be sentenced on the same date as Desimone.

All three are expected to pay restitution to the federal government.

Federal prosecutors say that from March 2001 to December 2001, the company moved some of its money out, parked it with co-conspirators, then back in, booking the money as new revenue.

That enabled the company to satisfy Wall Street that it was robust, allowing the executives to exercise millions of dollars' worth of stock options.

Homestore, based in Westlake Village, reported this year that it had overstated revenue in the first three quarters of 2001 by as much as $95 million.

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