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Former Netflix executive convicted on bribery, wire fraud charges

(Graphic by The Desk)

A former Netflix executive was convicted on Friday on several criminal charges related to wire fraud and bribery in connection with his job at the streaming service, the U.S. Department of Justice announced in an evening press release.

The conviction comes nearly three years after Michael Kail was indicted on nearly three dozen criminal charges by a federal grand jury in Northern California.

Kail, who served as the vice president of information technology (IT) at Netflix, was indicted on 28 of the 29 charges against him, Justice Department officials said.

Kail worked as a Netflix executive between 2011 and 2014, where he oversaw a staff of around 120 IT professionals. During his time at Netflix, he was responsible for approving contracts related to IT services and products that were supplied by outside vendors.

Evidence supplied by the Justice Department at trial showed Kail accepted kickbacks and bribes from at least nine companies in exchange for awarding them contracts in connection with various IT-related tasks at Netflix.

Companies that were alleged to have provided kickbacks to Kail in exchange for lucrative contracts with Netflix included Platfora, Netenrich and Sumo Logic, prosecutors said. Those companies and Netflix have not been accused of any criminal wrongdoing.

“Not only did Mr. Kail deprive Netflix of its money and resources by abusing his position as VP of IT Operations, he created a pay-to-play environment whereby he stole the opportunity to work with an industry pioneer from honest, hardworking, Silicon Valley companies,” Craig D. Fair, a special agent with the Federal Bureau of Investigation, said in a statement on Friday. “Bribes and kickback schemes, such as those facilitated by Mr. Kail, undermine the fabric of competition in Silicon Valley, and the FBI will aggressively pursue anyone who attempts to criminally exploit their position for personal gain.”

Kail is expected to be sentenced sometime within the next three months, prosecutors said. He faces up to 20 years in federal prison and hundreds of thousands of dollars in fines, though a judge is likely to sentence him to less prison time, if any. He remains out of custody in the meantime.

It is not clear if he will appeal his conviction and sentence, though criminal defendants often do after they are found guilty through a trial by jury.

According to a resume posted online, Kail bounced around from different Silicon Valley jobs after leaving Netflix in 2014. He most recently served as the executive technologist of Palo Alto Strategy Group, a firm that provides “investment advice and due diligence services” to those who are seeking to invest in software companies, the company’s website says.

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About the Author:

Matthew Keys

Matthew Keys is the publisher of The Desk and reports on the business and policy matters involving the broadcast television, streaming video and radio industries. He previously worked for Thomson Reuters, Disney-ABC, Tribune Broadcasting and McNaughton Newspapers. Matthew is based in Northern California, has won numerous awards in the field of journalism, and is a member of IRE (Investigative Reporters and Editors).