Posted by : trraju on Nov 29, 2003 - 04:55 AM General

America Online has accused two former human resources officials of conspiring to steal $100,000 from the company and it referred the matter to the U.S. attorney's office in Northern Virginia, AOL officials confirmed yesterday.
In a civil lawsuit filed in Loudoun County Circuit Court last Friday, AOL accused Gregory S. Horton, its former head of human resources, and Ruben Moreno, a vice president recruited by Horton, with conspiring to steal $100,000 earlier this year through a series of sham transactions. According to the lawsuit, Horton directed Pinebrook Consulting Inc., an Arizona firm specializing in human resources management, to forward $100,000 it had received from AOL to another company, which then passed the money along to HRC Realty, a Florida partnership controlled by Horton, Moreno and others.

"The Defendants have utilized a similar scheme to convert and/or embezzle money from at least one other of Horton's former employers, and Horton and Moreno entered into their Employment Agreements with AOL with the intent to . . . embezzle money from AOL using this same scheme," the AOL lawsuit said. "AOL has been damaged as a result of Horton's and Moreno's fraudulent conduct."

The lawsuit did not identify the former employer. Judith L. Wheat, a Washington lawyer who represents Horton, said in a faxed letter that she was reviewing the allegations and had not yet discussed them with her client.

"It is typical adversarial pleading that does not draw an accurate picture of my client," she wrote, adding, "I can tell you that Mr. Horton's employment history is a consistent record of high performance and achievement."

Phil Inglima, a lawyer who represents Moreno, declined comment. AOL, which is under federal investigation itself over accounting issues, was tipped off to the scheme by an employee who grew suspicious of Horton's directive to Pinebrook Consulting to pass the $100,000 it had received from America Online to another firm, sources said. Last summer, the company launched an internal investigation, which led AOL to fire Horton from his job as executive vice president of human resources, the lawsuit said.

Details of the suit were reported in yesterday's editions of the Wall Street Journal. AOL initially sought to recover the $100,000 by filing a lawsuit in Fairfax County Circuit Court against Pinebrook, which received the funds last April. America Online alleged that Pinebrook billed AOL for $100,000 of consulting work that it mostly failed to perform. AOL also alleged then that Pinebrook had passed the money along to a third-party company.

Aubrey Strickstein, president and owner of Pinebrook, said he could not comment on the details of his relationship with America Online due to a confidentiality agreement and the ongoing litigation. Strickstein also sought to distance Pinebrook from Horton.

"There is no relationship between my firm and Greg Horton," Strickstein said.

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