Jury finds ex-Netflix VP guilty in bribery, kickback scheme

Netflix exec is found guilty of receiving stock options and $500,000 in bribes and kickbacks from tech companies to approve contracts – and must forfeit the $2.6 million home he bought with the money

  • Former Netflix vice president Michael Kail, 49, was found guilty on Friday 
  • Prosecutors said Kail had accepted more than $500,000 in kickbacks – as well as stock options – in exchange for approving millions of dollars in contracts
  • Kail was indicted in 2018 on 19 counts of wire fraud, three counts of mail fraud, and seven counts of money laundering
  • He pleaded not guilty to the offenses but was found guilty of 28 of the 29 counts 

A federal jury found a former Netflix executive guilty Friday of receiving lucrative stock options and more than a half-million dollars in bribes and kickbacks from tech companies to approve contracts with the streaming giant.

Michael Kail, 49, of Los Gatos, California, is a former Netflix vice president who oversaw the company´s internet technology department.

‘We are very disappointed in the jury’s verdict,’ defense attorney Julia Jayne said. ‘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.’

Michael Kail, 49, of Los Gatos, California, is a former Netflix vice president who oversaw the company´s internet technology department

He must now forfeit his $2.6 million three-bedroom, two-bathroom Los Gatos home (pictured) to the federal government

Jayne said Kail helped drive the success of Netflix as a cutting-edge technology company. He intends to appeal, she said.

Kail was indicted in 2018 on 19 counts of wire fraud, three counts of mail fraud, and seven counts of money laundering. He had pleaded not guilty to the offenses.

The trial began April 19 in federal court in San Jose, California. The jury found him guilty on 28 of the 29 counts.

Prosecutors said that Kail had accepted more than $500,000 in kickbacks – as well as valuable stock options – in exchange for approving millions of dollars in contracts for nine tech companies seeking to do business with Netflix between February 2012 and July 2014.

In a statement, the the Department of Justice said: ‘He used his kickback payments to pay personal expenses and to buy a home in Los Gatos, California in the name of a family trust.’

The Mercury News reports he must now forfeit his $2.6 million three-bedroom, two-bathroom Los Gatos home to the federal government.

The Zillow listing for the property reads: ‘This home has been updated and expanded and is in good condition ready for your buyers to move right in or remodel! Rare 3 car garage – Bring your imagination and creativity.’

Kail created and controlled a limited liability company, Unix Mercenary LLC, to receive the bribes, fund personal expenses and buy a home in Los Gatos, California, prosecutors said.

Kail was indicted in 2018 on 19 counts of wire fraud, three counts of mail fraud, and seven counts of money laundering. He had pleaded not guilty to the offenses. His Los Gatos home is pictured

The trial began April 19 in federal court in San Jose, California. The jury found him guilty on 28 of the 29 counts. Pictured: his home which he must forfeit

Netflix prohibits its employees from having conflicts of interest and requires them to disclose actual or apparent conflicts of interest and to report gifts from people or entities seeking to sell to the company, authorities said. Kail worked at Netflix from 2011 until July 2014.

He could face up to 20 years in prison and fines and will likely be sentenced in three months. He remains free on bond in the meantime.

Netflix declined comment on the verdict.

‘Not only did Mr. Kail deprive Netflix of its money and resources by abusing his position as VP of IT Operations,’ FBI Special Agent in Charge Craig D. Fair said in a statement, ‘he created a pay-to-play environment whereby he stole the opportunity to work with an industry pioneer from honest, hardworking Silicon Valley companies.’

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