A federal jury in San Jose returned guilty verdicts on 28 of 29 counts against Michael Kail, the former vice president of IT Operations at Netflix,including charges of wire fraud, mail fraud, honest-services fraud and money laundering.
According to a press release from the U.S. Attorney's Office for the Northern District of California, Kail took kickbacks from nine different companies between 2012 and 2014. "In exchange, Kail approved millions of dollars in contracts for goods and services to be provided to Netflix," according to the press release. "Kail ultimately received over $500,000 and stock options from these outside companies. 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."
In one instance, the lawyers said, Kail gave Platfora, Inc., inside information about a competitor's bid after signing an "advisory agreement" with Platfora that gave him the option to buy 75,000 options from the company. "Kail then urged his Netflix employees to find a use for the product, despite their objections and preference for a competing product that Netflix was already paying for. When an inquiry from the Netflix CEO ensued, Kail falsely denied that he was formally working with Platfora. Kail resigned from his advisory position at Platfora the next week."
According to the Associated Press, Kail's attorney, Julia Jayne, said the jury's decision "just 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."
Kail could face up to 20 years in prison when he is sentenced, likely this summer.