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Former AOL Official Admits $100,000 Fraud

By David A. Vise
Washington Post Staff Writer
Friday, January 14, 2005; Page E05

The former head of human resources at America Online pleaded guilty yesterday to a wire-fraud charge in connection with the theft of $100,000 from the Internet firm.

Gregory S. Horton was executive vice president of human resources at Dulles-based AOL from November 2002 until August 2003. He pleaded guilty in U.S. District Court in Alexandria to participating in a scheme to steal money by hiring an outside consultant that shared its fees with him, according to papers filed in court yesterday.

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Horton directed a consulting firm hired by AOL and other consultants hired by two previous employers to pass along money to companies that he directly or indirectly controlled, according to a statement by Paul J. McNulty, U.S. attorney for the Eastern District of Virginia.

At America Online, Horton hired a consultant for $100,000 to survey AOL call-center employees, then directed that firm to pay the money to a company he controlled. In return, Horton promised to send the consultant future business, according to court documents. Meanwhile, the call-center survey was done in-house.

In addition to taking $100,000 from AOL, Horton took $1.8 million from AutoNation Inc. and $333,000 from Qwest Communications International Inc., using the same basic scheme with outside consultants, according to court documents. Horton worked at the other two companies before he joined AOL, which sued him in November 2003 seeking recovery of the money he took from the online firm.

"We are pleased with this outcome, as it was AOL's internal controls that quickly uncovered this scheme, enabling us to turn the issue over to the U.S. attorney's office for further investigation," America Online spokesman Jim Whitney said yesterday.

Horton, 38, of Weston, Fla., faces a maximum of 20 years in prison and a $250,000 fine; he must also repay the stolen money. He is scheduled to be sentenced on April 22 by U.S. District Judge James C. Cacheris. Horton's lawyer, Judith L. Wheat, did not respond yesterday to a phone call seeking comment.

As part of his plea agreement, Horton pledged to cooperate with any investigation of the matters, including testifying before a federal grand jury or at trials. He also agreed to turn over records and documents related to the schemes and to submit to polygraph tests at the government's request.

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