Time Warner to Pay Feds $510 Mil. Over AOL Charges

NEW YORK Time Warner on Wednesday said it agreed to pay $510 million to settle federal investigations into charges its American Online subsidiary artificially inflated ad revenue, mainly in 2001 and 2002.

The sum included a proposed $300 million penalty to the Securities and Exchange Commission and $210 million, including a $60 million penalty and a $150 million reserve fund for litigation settlements, to settle a Department of Justice probe, the company said in a statement.

At issue were dealings that may have let AOL exaggerate its growth before it merged with Time Warner in January 2001.

Time Warner said it would adjust its accounting for $400 million in ad revenues chalked up primarily in 2001 and 2002 in deals with Bertelsmann A.G. of Germany, and for $30 million in ad revenues from two customers it did not identify.