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4th Former Executive of Homestore Pleads Guilty in Revenue Scheme

March 04, 2003|E. Scott Reckard | Times Staff Writer

A former manager of acquisitions at Homestore Inc. pleaded guilty to securities fraud Monday as part of his agreement to assist a federal investigation into a phony-revenue scheme at the Westlake Village Internet real-estate company.

Jeffrey M. Kalina of Woodland Hills is the fourth and lowest-ranking of four former Homestore executives to admit wrongdoing in the scheme. Federal prosecutors in Los Angeles, working with the L.A. office of the Securities and Exchange Commission, accused Kalina of deceiving auditors and falsifying records to help conceal revenue shortfalls in 2001.

Kalina, who entered his guilty plea before U.S. District Judge Percy Anderson in Los Angeles, is scheduled to be sentenced Sept. 15 along with the three other executives who have pleaded guilty, said Assistant U.S. Atty. Michael Wilner.

Kalina also has agreed to repay $74,348 -- his profit, plus interest, from selling Homestore stock at a time he knew the company was recording millions of dollars of its own money as advertising sales.

Homestore's online services, all related to residential real estate, are built around the homes-for-sale listings on its core site, Realtor.com. U.S. Atty. Gen. John Ashcroft praised its board of directors for thoroughly investigating the scandal and ousting its original management, including its founding chief executive, Stuart Wolff, and top marketing strategist, Peter J. Tafeen.

Wolff and Tafeen remain under criminal investigation, according to their attorneys, but no charges have been filed.

Under federal sentencing guidelines, Kalina could be imprisoned 12 to 18 months. But if prosecutors extol his cooperation, a judge could reduce the sentence.

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