Michael Kail, Bribery and Kickbacks, California 2018

Former Netflix Executive Convicted of Receiving Bribes and Kickbacks

A federal jury convicted Michael Kail, the former Vice President of IT Operations at Netflix, of wire fraud, mail fraud, and money laundering in a high-profile bribery and kickbacks scandal.

Kail, 49, of Los Gatos, California, was employed at Netflix from 2011 until July 2014 and was responsible for approving contracts to purchase IT products and services from smaller outside vendor companies.

The evidence presented at trial demonstrated that Kail accepted bribes in ‘kickbacks’ from nine tech companies providing products or services to Netflix, including Netenrich, Inc. and Unix Mercenary, LLC, a limited liability corporation controlled by Kail.

In exchange for the kickbacks, Kail approved millions of dollars in contracts for goods and services to be provided to Netflix, receiving over $500,000 and stock options from these outside companies.

Kail used his kickback payments to pay personal expenses and to buy a home in Los Gatos, California, in the name of a family trust.

“Bribery undermines fair competition and innovation in any business arena, and particularly Silicon Valley’s highly competitive environment of cutting-edge innovation,” said Acting United States Attorney Stephanie M. Hinds.

The jury returned a verdict of guilty on 28 of the 29 counts, including wire fraud, mail fraud, and money laundering, and found real property purchased by Kail with laundered money to be forfeitable to the government.

The indictment also sought forfeiture of Kail’s Los Gatos residential property.

As part of the conviction, Kail is facing a lengthy prison sentence and significant fines.

The case is a reminder of the importance of holding public officials accountable for their actions and upholding the public’s trust in government and business.

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