In 2014, Netflix sued its former CTO, Michael Kail, accusing him of accepting bribes before leaving the company to join Yahoo (in 2016, Yahoo merged with AOL to form Oath, which was the parent company of Engadget before its takeover by Verizon). He was ultimately charged with taking $ 690,000 in bribes from tech companies that had contracts with Netflix, a scheme the company said it discovered while examining emails from his business account.
The trial was delayed due to the COVID pandemic, but on Friday a jury convicted Kail on 28 of the 29 charges he faced. In a statement to BloombergKail’s attorney proclaimed his innocence, accused Netflix of using its influence as a powerful corporation to conduct the lawsuits, and said there would be an appeal of the verdict. During the trial, Law360 reports that its defense attributed the agreements to Netflix’s “rule-less” culture, and said they were legitimate.
According to FBI Special Agent in Charge Craig D. Fair, Kail “created a rewarding environment in which he stole the opportunity to work with an honest and hardworking Silicon Valley industry pioneer.” In one statement of the accusation, he broke down the business payments to Kail’s consulting firm and what they were paid by Netflix. He says he has received over $ 500,000 and stock options from companies.
Netflix has not commented publicly on the result, but in 2014 it said the various vendors involved were paid more than $ 4 million, with Kail receiving 12-15% commissions from at least two companies. Netflix and Kail settled their trial in 2015. He remains out on bail pending sentencing, and could face up to 20 years in prison and a fine. Regardless of what happens in the sentencing or appeal process, between this $ 690 million Ponzi scheme, Netflix is accumulating its own library of documentary content on real crime.
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