This Friday, the federal jury found an ex-Netflix vice president guilty of collecting bribes, kickbacks, and stock options worth more than $500,000. These bribes were taken from multiple tech companies to accept contracts on behalf of Netflix.
As per Fox News, The ex-vice president, Michael Kail, was responsible for overseeing the company’s IT department. The former executive was accused in 2018 on 19 counts of wire fraud, 7 counts of money laundering, and 3 counts of mail fraud, totaling 29 counts, out of which the court has found him guilty on 28 counts.
Netflix strictly does not allow its employees to have any conflicts of interest, and if there is such a situation, then the company expects to be informed. Furthermore, it also requires them to notify the company of gifts from people or entities looking to sell to the company
Kail’s trial began on April 19th in the federal court in San Jose, California. During the trial, the prosecutors claimed that Kail had accepted more than half a million in kickbacks, including valuable stock options from a total of 9 tech companies. The bribes were taken to approve contracts of companies willing to work with Netflix. Kail’s fraudulent activities had been going on from February of 2012 till July 2014.
FBI Special Agent in Charge Craig D. Fair stated,
Not only did Mr. Kail deprive Netflix of its money and resources by abusing his position as VP of IT Operations, he created a pay-to-play environment whereby he stole the opportunity to work with an industry pioneer from honest, hardworking Silicon Valley companies.
It was also found that Kail had found an LLC. A limited liability company by the name of Unix Mercenary LLC, to pocket the bribes, purchase a house in Los Gatos, California, and to pay for personal expenses.
It must also be noted that Kail was sued by Netflix after he exited the company in 2014 and joined Yahoo as the CIO.
#BREAKING: A federal jury convicts Michael Kail, the former Vice President of IT Operations at Netflix, of fraud for obtaining pay-to-play bribes and kickbacks from tech startups. pic.twitter.com/xkVcCpdblD
— FBI SanFrancisco (@FBISanFrancisco) April 30, 2021
As per Kail’s attorney, Julia Jayne,
We are very disappointed in the jury’s verdict, It goes to show that an innocent person can be convicted when there are so many counts stacked against them and there is a powerful corporation, Netflix, driving the investigation and prosecution.
According to the Department of Justice, Kail could face a maximum of 20 years in prison, including a fine. The fine is set to be $250,000, double the amount he pocketed or twice the amount of Netflix’s loss per wire fraud, whichever is higher. The sentence also includes a maximum of 10 years of prison for money laundering.
However, at the moment, Kail is free on bond and is likely to be sentenced in 3 months. Netflix has not commented anything on the verdict of the court or the matter.
In a press release, the acting US Attorney Stephanie Hinds said that bribery hinders fair competition and innovation in any business, especially in the highly competitive environment of Silicon Valley. She also added that as the VP of Netflix’s IT Operations Kail had great power and authority which he misused to approve contracts with small tech companies in return for temporary financial gains. Netflix and all other companies deserve honesty from their employees.
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