DA Vance Announces Indictment of Newsweek and Christian Media Chiefs in Long-Running $10 Million Fraud Probe


October 11, 2018

Manhattan District Attorney Cyrus R. Vance, Jr., today announced the indictment of WILLIAM ANDERSON; ETIENNE UZAC; IBT MEDIA, INC., a/k/a NEWSWEEK MEDIA GROUP; CHRISTIAN MEDIA CORPORATION; and OIKOS NETWORKS, INC., for a nationwide scheme to fraudulently obtain approximately $10 million in financing, and launder the money through a network of corporate bank accounts. The defendants are charged in a ten-count New York Supreme Court indictment with Scheme to Defraud in the First Degree, Conspiracy in the Fourth Degree, Money Laundering in the Second Degree, Falsification of Business Records in the First Degree, and Criminal Contempt in the Second Degree.(1)

“As alleged in the indictment, the defendants used the name of a storied Manhattan-based media company to further their financial criminal activity,” said District Attorney Vance. “Etienne Uzac and his co-defendants are charged with conspiring to secure millions in funding that never would have come had they been honest about Newsweek’s financial health. The defendants’ brazen attempts to disguise the fraud – by creating a fictitious auditor, and laundering their transactions through a series of corporate accounts – were unraveled by my Office’s Major Economic Crimes Bureau, which remains committed to ensuring the integrity of New York’s core industries and financial marketplace.”

According to court documents, beginning on March 18, 2015, ANDERSON was the Chief Executive Officer of CHRISTIAN MEDIA CORPORATION (“CMC”); UZAC was the co-owner and Chairman of IBT MEDIA, INC. (“IBT”); and an unindicted co-conspirator was the General Manager of OIKOS NETWORKS (“OIKOS”). The defendants worked together to obtain loans from financial institutions to purportedly purchase sophisticated computer servers valued at a range of $130,000 to $180,000.

In order to secure the financing, UZAC and ANDERSON overstated the respective financial health of both CMC, and Newsweek, LLC to prospective lenders, and provided false financial statements to the lenders. To make their false financial statements appear legitimate, UZAC and ANDERSON created a fictitious auditor, “Karen Smith, LLP,” and created and maintained a website, phone number, and email address for “Karen Smith,” who did not exist.

Over the course of the scheme, OIKOS, which the parties held out as an independent vendor, received approximately $10 million from lenders, purportedly to provide highly sophisticated computer servers to Newsweek, LLC, and CMC. Instead, OIKOS provided the defendants with fewer servers of significantly less value and immediately transferred nearly all of the remaining funds to accounts controlled by UZAC, ANDERSON, and their respective companies.

The defendants then transferred the funds through multiple corporate accounts to mask their origin, and to disguise the fact that the funds weren’t being used to purchase equipment. The majority of the money was used to fund day-to-day operations and for purposes unrelated to the stated purpose of the financing. UZAC and ANDERSON used some of the money to make monthly payments on previously-received financing, helping to ensure that the lenders would not notice the scheme and would continue to fund fraudulent financing transactions. In some instances, UZAC and ANDERSON made monthly payments using new funds from the very same lenders they were paying back.

The indictment is the result of an ongoing investigation by the District Attorney’s Major Economic Crimes Bureau.

Assistant D.A.s Solomon Shinerock and Sean Pippen are handling the prosecution of this case under the supervision of Assistant D.A.s Julieta Lozano, Deputy Chief of the Major Economic Crimes Bureau, and Christopher Conroy, Chief of the Major Economic Crimes Bureau, as well as Executive Assistant D.A. Michael Sachs, Chief of the Investigation Division. Senior Investigator Anthony Santoro, Financial Intelligence Analyst Rosalind October, Forensic Accountant Investigator Ken Zorn, Investigative Analyst Annie Wattenmaker, and Paralegals Ashley Richards and Matt Nelson assisted with the investigation.

District Attorney Vance thanked the New York State Police and particularly Troop K for its assistance with the investigation.

(1) The charges contained in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty. All factual recitations are derived from documents filed in court and statements made on the record in court.

 

Defendants:

WILLIAM ANDERSON, D.O.B. 1/14/1985
New York, New York

Charged:

  • Money Laundering in the Second Degree, a class C felony, two counts
  • Scheme to Defraud in the First Degree, a class E felony, one count
  • Conspiracy in the Fourth Degree, a class E felony, one count
  • Falsifying Business Records in the First Degree, a class E felony, five counts
  • Criminal Contempt in the Second Degree, a class E felony, one count

ETIENNE UZAC, D.O.B. 1/1/1983
New York, New York

Charged:

  • Money Laundering in the Second degree, a class C felony, two counts
  • Scheme to Defraud in the First degree, a class E felony, one count
  • Conspiracy in the Fourth Degree, a class E felony, one count
  • Falsifying Business Records in the First Degree, a class E felony, five counts

IBT MEDIA, A.K.A. NEWSWEEK MEDIA GROUP
New York, New York

Charged:

  • Money Laundering in the Second Degree, a class C felony, two counts
  • Scheme to Defraud in the First Degree, a class E felony, one count
  • Conspiracy in the Fourth Degree, a class E felony, one count
  • Falsifying Business Records in the first degree, a class E felony, four counts

CHRISTIAN MEDIA CORPORATION
New York, New York

Charged:

  • Money Laundering in the Second degree, a class C felony, two counts
  • Scheme to Defraud in the First degree, a class E felony, one count
  • Conspiracy in the Fourth Degree, a class E felony, one count
  • Falsifying Business Records in the First Degree, a class E felony, one count
  • Criminal Contempt in the Second Degree, a class E felony, one count

OIKOS NETWORKS
New York, New York

Charged:

  • Money Laundering in the Second Degree, a class C felony, one count
  • Scheme to Defraud in the First Degree, a class E felony, one count
  • Conspiracy in the Fourth Degree, a class E felony, one count