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Etienne Uzac, a former co-owner of IBT Media and Newsweek Media Group, pleaded guilty Friday morning to money laundering in the second degree and scheme to defraud in the first degree. William Anderson, the former CEO of Christian Media Corporation (CMC), pleaded guilty to the same charges.
CMC and IBT Media, the former parent company of Newsweek, were charged in late 2018 with a $35 million scheme to obtain loans and defraud lenders. The charges included money laundering, falsifying business records and conspiracy. Uzac will be sentenced to "probation and possibly community service" when he is formally sentenced on April 20, said Marc Agnifilo, Uzac's attorney, in a statement to Newsweek. He will not face jail time.
"While Mr. Uzac exhibited poor judgment in how he secured certain loans, today's disposition appropriately reflects that these loans were repaid. Mr. Uzac, who has never been in any legal trouble, looks forward to moving past this difficult chapter," the statement said.
The Friday plea was the culmination of a multi-year investigation by the office of Manhattan District Attorney Cyrus Vance Jr., which became public in January 2018 when investigators served a search warrant on Newsweek Media Group's offices in New York City and seized 18 servers.
Newsweek Media Group restructured in September 2018, splitting Newsweek into a separate, standalone entity; Uzac has no stake in the magazine or website.
The indictment described a complicated financing plan that allegedly took place between March 2015 and October 2016. "The objects of the conspiracy were fraudulently to obtain financing from financial institutions, divert the proceeds of the financing and conceal its origins in order to fund day to day operations and meet other needs unrelated to the stated purpose of the financing, and maintain a credit profile sufficient to continue promoting the financing scheme," said the indictment.
Update 2/14, 3:45 p.m. ET: This story was updated to include a statement from Uzac's attorney.
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Nancy started her journalism career in Newsweek's Letters Department, answering reader mail. She became a researcher, writer and then senior editor of ... Read more