The former vice president of business development at Homestore Inc., the largest provider of Internet home listings, pleaded guilty to helping to inflate the company's revenue, federal prosecutors said Thursday.
Meanwhile, the Westlake Village-based company reported a fourth-quarter net loss of $4.6 million, or 3 cents a share, contrasted with net income of $6 million, or 4 cents a share, for the fourth quarter of 2004.
Homestore's revenue for the fourth quarter was $66.6 million, compared with $54.3 million in the year-earlier quarter.
The latest quarter included a previously disclosed charge of $5.9 million for legal expenses related to reimbursements of legal fees to the former executive who pleaded guilty Thursday.
The former executive, Peter Tafeen, 36, admitted to orchestrating so-called round-trip transactions that helped sales exceed Wall Street expectations, the U.S. attorney's office in Los Angeles said. Tafeen pleaded guilty to one count of securities fraud and faced as many as 10 years in prison, prosecutors said.
Tafeen is the 10th former Homestore executive to plead guilty in connection with the accounting fraud. Homestore's shares plunged when the round-trip transactions were made public in 2002, costing investors as much as $100 million, prosecutors said. Former Chief Executive Stuart Wolff is scheduled to go on trial March 28.
"He's ready to close this chapter of his life and move on," Brian Hennigan, Tafeen's lawyer, said in a telephone interview.