Monster backdating options criminal probe not over : US Business

By Leslie Gevirtz

NEW YORK (Reuters) - U.S. prosecutors are continuing their criminal investigation into the manipulation of stock options at Monster Worldwide Inc , according to a filing in U.S. District Court in Manhattan.

U.S. Attorney for the Southern District of New York, Michael Garcia, is seeking to have depositions by six former top executives at the global online employment service delayed up to 60 days so that his staff can complete their criminal case.

The government is seeking to intervene in a civil suit against the company and its top executives that charges they "engaged in a long-running scheme to improperly backdate and account for numerous stock option grants at Monster Worldwide Inc."

Monster's former general counsel, Myron Olesnyckyj, pleaded guilty in March 2007 to charges of conspiracy and securities fraud and is expected, according to the filing, to testify against others at any upcoming trials.

Andrew McKelvey, Monster's former chief executive officer, pleaded guilty in January this year to the scheme, which resulted in the company falsely reporting its net income.

The court filing gives as one example, Monster's annual 10-K filing for 2001, which reported the company's "net income was $69,020,000, but this was, in fact, an overstatement of more than 1,900 percent..."

"In all, the backdating scheme resulted in an understatement of compensation expense in the amount of approximately $339 million, pretax, during the period 1997 through 2005," said the memorandum, which was filed late on Tuesday.

The government is seeking to temporarily block lawyers in the civil suit from deposing not only Olesnyckyj, but also: Erin Barriere, the former manager of human resources; Margaretta Noonan, former director of human resources; Andrew Burchill, the company's former assistant general counsel; Michael Piotrowski, Monster's former stock options administrator; and Steve Pogorzelski, formerly president of Monster, North America and a group president.

"The government expects that each of these individuals will be a witness in any future criminal prosecutions arising from the backdating scheme," the filing said.

Prosecutors said in the filing that all the parties in the civil action had "consented to the Government's motion to intervene."

(Editing by Tim Dobbyn)

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