Former Charter Execs Sentenced in Accounting Scandal

Apr 22, 2005  •  Post A Comment

Four former Charter Communications executives were sentenced Friday for their roles in an accounting scandal in 2001 and 2002 that inflated subscriber counts and revenue and duped investors and regulators.

A U.S. District Court judge in St. Louis sentenced former Chief Financial Officer Kent Kalkwarf to 14 months in federal prison, a fine of $200,000 and two years’ probation.

Former Chief Operating Officer David Barford was hit with a sentence of one year and one day in jail, a $200,000 fine and two years’ probation.

Former Senior VP David McCall was hit with two years’ probation and a $200,000 fine, while another senior VP, James Smith III, was slapped with a $175,000 fine plus two years’ probation.

Charter itself was not implicated in the executives’ scheme, and cooperated with federal officials in their investigation into the scandal.

The sentences stem from a series of moves committed by the executives that were designed to mask the company’s true financial health. Federal prosecutors claimed that Mr. Kalkwarf paid Charter’s set-top box suppliers to charge the company $20 more per box and then return that money to Charter, which booked it as revenue. In addition, executives were accused of ordering employees to delay voluntary and involuntary customer disconnects until the end of a quarter in order to include those customers in final subscriber counts.