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PurchasePro Defendant is Acquitted: EX-COMPANY OFFICIAL HAD BEEN ACCUSED OF CONSPIRACY, FRAUD

Posted on: Friday, 23 December 2005, 09:00 CST

By Jim Jordan, The Lexington Herald-Leader, Ky., The Lexington Herald-Leader, Ky.

Dec. 23--A former PurchasePro executive who was indicted in January with Lexington native Charles "Junior" Johnson has been found not guilty on all counts after a trial in Alexandria, Va.

Scott Wiegand, the company's former senior vice president and general counsel, faced six counts of conspiracy, securities fraud and lying to auditors and the FBI.

He was acquitted by U.S. District Judge Walter D. Kelley Jr. after a seven-day bench trial that ended Tuesday.

Johnson's attorney, Yale Lance Galanter of Miami, Fla., could not be reached yesterday for comment on what effect the verdict might have on Johnson's case.

Galanter said after his indictment that "Junior has never looked forward to anything more than letting these issues come to light and to defending himself in this case."

Johnson and two other former PurchasePro executives, plus two former executives of America Online, have pleaded not guilty and are scheduled be tried by a jury beginning Sept. 5.

Six other former Purchase Pro executives have pleaded guilty in the case.

Johnson, the CEO and founder of now-defunct PurchasePro, is accused of conspiracy, fraud and money laundering.

Prosecutors allege the defendants concocted a scheme to inflate PurchasePro's revenue so the Las Vegas company could meet Wall Street expectations and appear successful to investors.

The indictment charges that Johnson gave AOL a stake in PurchasePro in exchange for AOL's help in selling PurchasePro's main product, a so-called "marketplace license" for business-to-business transactions.

When AOL was unable to sell the licenses, the indictment alleges that it made secret side deals to induce companies to buy the licenses.

AOL executives used deception to make it appear the licenses had been sold in early 2001 so PurchasePro could meet its revenue goals, according to the indictment.

Other former PurchasePro executives who are awaiting trial are Christopher Benyo, former senior vice president of marketing, who is charged with conspiracy and fraud; and Joseph Michael Kennedy, former senior vice president, who is charged with conspiracy, fraud and making a false statement to the FBI.

The American Online defendants are Kent Wakeford, former executive director at AOL's business affairs unit, and John Tuli, former vice president in AOL's NetBusiness unit.

Reach Jim Jordan at (859) 231-3242 or 1-800-950-6397, Ext. 3242, or jjordan1@herald-leader.com [mailto:jjordan1@herald-leader.com].

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Copyright (c) 2005, The Lexington Herald-Leader, Ky.

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Source: Lexington Herald-Leader (Lexington, Ky.)

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