A $25 million fraud and money-laundering scandal that ensnared Newsweek magazine and a small, California bible college wrapped up Friday with guilty pleas from two executives who had masterminded the scheme.
Etienne Uzac, former co-owner of IBT Media, which owned Newsweek at the time; and William Anderson, former CEO of Christian Media, both pleaded guilty on Friday before Manhattan District Judge Ruth Pickholz in a bid to avoid getting tossed in the slammer. Uzac and Anderson each pleaded guilty to one count of fraud and one count of money laundering.
Judge Pickholtz accepted the guilty pleas in exchange for a promise of no jail time — but said she could revoke the offer if new information came to light before their April 20 sentencing.
If that happens, the defendants will be permitted to withdraw their guilty pleas, the judge said.
“I’m just focusing on getting this behind us,” said Uzac, who severed ties with Newsweek and IBT Media shortly after a highly publicized January 2018 raid on the storied magazine.
The guilty pleas wrap up a nearly four-year investigation by Manhattan District Attorney Cyrus Vance, which charged Uzac and Anderson with fraudulently obtaining $25 million in loans and laundering the cash through a network of corporate bank accounts including Newsweek’s.
Vance’s probe had included the 2018 raid on Newsweek offices, in which 18 computer servers were carted away. The investigation had already been underway for 17 months when police from the Manhattan DAs office raided the offices.
Months after the raid, the DA’s office revealed an extensive list of alleged accomplices, including Andrew Lin, chairman of the board of trustees at Olivet University; and John Xiao, Olivet’s finance director and dean of its business school.
The money-laundering charges had embroiled Newsweek in a separate controversy as staff tried to figure out what their bosses were up to. Editor-in-chief Bob Roe and executive editor Ken Li who tried to investigate the owners of the company and their ties to Olivet, a fundamentalist Christian college were fired.
Nancy Cooper was installed as editor-in-chief in February and supervised the publication of a protest letter stating that the owners of IBT Media and the Newsweek Media Group had engaged in “egregious breaches of journalistic ethics.”
They claimed a company official that was a subject of the story had asked journalists to identify confidential sources used in their reporting.
Newsweek was eventually spun off from IBT and Uzac had relinquished his ownership stake as the company sought to separate the magazine and website from the controversy.
The owners of IBT Media were all followers of the Korean cleric David Jang, whose followers were also involved in the fundamentalist Christian college Olivet University. It had a small operating campus in San Francisco and had purchased a former mental hospital in upstate New York with plans to build a second campus there. But those plans stalled.