Former L90 Executives to Plead Guilty

Three former officers of L90 Inc., an Internet marketing company founded in Marina del Rey, will plead guilty to taking part in a scheme to inflate advertising revenue, U.S. officials said Wednesday.

L90, which moved to New York and now is known as MaxWorldwide Inc., also agreed to settle civil claims by the Securities and Exchange Commission, officials said.

The SEC said L90 misclassified about $26 million in research and development expenses in 2000 and 2001 and also swapped advertising with other Internet companies while fraudulently recording the exchange of money as income.

Last May, the company restated 2000 and 2001 earnings because it improperly accounted for revenue.

An internal investigation focused on two transactions with Westlake Village-based Homestore Inc. in the second and third quarters of 2001, L90 said. Four Homestore executives have pleaded guilty to inflating earnings.

Lawsuits filed on behalf of shareholders accuse Homestore of using advertising deals to funnel money through L90 and other companies to AOL Time Warner Inc.’s America Online unit and then back to online realtor Homestore, where it could be counted improperly as revenue.

The three L90 officers who will plead guilty to criminal charges are John Bohan, 38, L90’s former chief executive and president; Mark Roah, 34, senior vice president of business development; and Lucrezia Bickerton, 31, vice president of finance, prosecutors said.

Bickerton has helped the government with its investigation, her attorney, Nathan Hochman, said. Attorneys for Roah and Bohan could not be reached for comment.

The three also will settle SEC civil claims. A fourth employee, Chantel Loo, who was L90’s controller and director of finance, also settled with the agency.