Ex-Netflix veep allegedly banked payola for tech deals with web TV giant

Michael Kail's House of Cards tumbles, now Orange is his New Black, potentially


A former vice-president at Netflix has been indicted for allegedly taking illegal kickbacks while making multimillion-dollar deals with the streaming giant's tech providers.

The US Attorney's Office for Northern California, in the US, said Michael Kail, formerly the VP of Internet Technology at the online telly goliath, took more than half a million dollars in payoffs from companies that wanted to sell Netflix the equipment it uses to prop up its massive video library. He is charged with wire fraud, mail fraud, and money laundering.

Marco Polo in 4K on Netflix

Netflix could pwn 2020s IT security – they need only reach out and take

READ MORE

Kail, 49, is accused of taking the kickback payments in exchange for approving contract bids from nine unnamed companies seeking to partner with Netflix. The payments were made by three companies seeking deals with Netflix, though the DOJ believes that Kail was also given stock options by "numerous other Netflix business partners" while in his VP role.

"In exchange for these payments, Kail allegedly approved millions of dollars in contracts for goods and services to be provided to Netflix by these companies," prosecutors said in announcing the indictment on Tuesday.

The kickbacks were then funneled through a limited liability company Kail set up and used to purchase a new home in the Silicon Valley suburb of Los Gatos – thus answering the question of what it takes to afford a home in Los Gatos these days.

He stands to lose that home, and face a fine of $1m if he is convicted on the nineteen counts of wire fraud, three counts of mail fraud, and seven counts of money laundering listed in the Department of Justice's indictment.

More importantly, Kail would face a maximum of 20 years behind bars for each of the fraud counts and 10 years for each of the money laundering charges, if found guilty. Should he be convicted, Kail would likely get a more lenient sentence.

Kail's next scheduled court appearance is for a July 10 status conference. Until then, he is free on bond. ®

Narrower topics


Other stories you might like

  • China reveals its top five sources of online fraud
    'Brushing' tops the list, as quantity of forbidden content continue to rise

    China’s Ministry of Public Security has revealed the five most prevalent types of fraud perpetrated online or by phone.

    The e-commerce scam known as “brushing” topped the list and accounted for around a third of all internet fraud activity in China. Brushing sees victims lured into making payment for goods that may not be delivered, or are only delivered after buyers are asked to perform several other online tasks that may include downloading dodgy apps and/or establishing e-commerce profiles. Victims can find themselves being asked to pay more than the original price for goods, or denied promised rebates.

    Brushing has also seen e-commerce providers send victims small items they never ordered, using profiles victims did not create or control. Dodgy vendors use that tactic to then write themselves glowing product reviews that increase their visibility on marketplace platforms.

    Continue reading
  • US recovers a record $15m from the 3ve ad-fraud crew
    Swiss banks cough up around half of the proceeds of crime

    The US government has recovered over $15 million in proceeds from the 3ve digital advertising fraud operation that cost businesses more than $29 million for ads that were never viewed.

    "This forfeiture is the largest international cybercrime recovery in the history of the Eastern District of New York," US Attorney Breon Peace said in a statement

    The action, Peace added, "sends a powerful message to those involved in cyber fraud that there are no boundaries to prosecuting these bad actors and locating their ill-gotten assets wherever they are in the world."

    Continue reading
  • Another ex-eBay exec admits cyberstalking web souk critics
    David Harville is seventh to cop to harassment campaign

    David Harville, eBay's former director of global resiliency, pleaded guilty this week to five felony counts of participating in a plan to harass and intimidate journalists who were critical of the online auction business.

    Harville is the last of seven former eBay employees/contractors charged by the US Justice Department to have admitted participating in a 2019 cyberstalking campaign to silence Ina and David Steiner, who publish the web newsletter and website EcommerceBytes.

    Former eBay employees/contractors Philip Cooke, Brian Gilbert, Stephanie Popp, Veronica Zea, and Stephanie Stockwell previously pleaded guilty. Cooke last July was sentenced to 18 months behind bars. Gilbert, Popp, Zea and Stockwell are currently awaiting sentencing.

    Continue reading

Biting the hand that feeds IT © 1998–2022