U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19935 / December 5, 2006
Accounting and Auditing Enforcement Release No. 2521 / December 5, 2006
SEC v. John Giesecke, Jr., Joseph J. Shew, and John R. DeSimone, (U.S. District Court for the Central District of California, Civil Action No. 02 CV 7471 SVW (RZx)
Former Homestore Executives Sentenced for Role in Financial Fraud Scheme
The Securities and Exchange Commission today announced that the Honorable Percy Anderson, U.S. District Judge for the Central District of California, sentenced John Giesecke, Jr., 45, Joseph J. Shew, 41, and John R. DeSimone, 37, based upon their 2002 guilty pleas for their role in a scheme to inflate Homestore's advertising revenues. Giesecke, Homestore's former COO, was sentenced on November 13, 2006, to serve twelve months in federal prison followed by six months of home detention. Shew, Homestore's former CFO, was sentenced on November 20, 2006, to serve six months in federal prison followed by six months of home detention. Giesecke and Shew were also ordered to serve three years of supervised release following their prison terms. DeSimone, Homestore's former vice president of finance, was sentenced on October 30, 2006, to serve six months of home detention followed by three years of probation, plus 300 hours of community service.
In their plea agreements, Giesecke, Shew, and DeSimone each admitted that during the first three quarters of 2001, each participated in a scheme to inflate Homestore's advertising revenues through the use of illegal round-trip transactions. All three individuals settled with the Commission on September 25, 2002, by consenting to the entry of permanent injunctions against them in addition to other monetary and non-monetary relief. The Commission has settled enforcement actions with a total of 15 individuals for their roles in the Homestore scheme. All of the money collected from these individuals in connection with their settlements, has been paid into a fund to benefit the defrauded Homestore shareholders pursuant to the Fair Funds provision of the Sarbanes-Oxley Act of 2002. To date, approximately $9 million has been collected and deposited into the fund.