Charges of criminal securities fraud have been brought by the US Justice Department against America Online, the troubled internet unit of Time Warner.

The department claims that certain AOL executives colluded with PurchasePro, a smaller internet company, to exaggerate advertising revenues in the run-up to its merger with Time Warner in January 2000.

TW itself is accused of aiding and abetting the fraud but will likely avoid prosecution under two settlements with US authorities that will cost it $510 million (€379.77m; £262.26m).

In an associated tradeoff with the US Securities and Exchange Commission, TW will also pay $300m to settle a civil investigation into several AOL accounting eccentricities, including the treatment of a $400m payment from Bertelsmann, relating to the German media group's sale of its stake in AOL Europe.

Also lurking in the wings are lawsuits launched by shareholders seeking compensation. It is likely TW will also settle these actions quietly as it seeks to repair its standing with the capital markets.

The media giant is anxious to put the whole sorry affair behind it as soon as possible in order to bid unimpeded for cable television and other assets coming up for sale in 2005.

Did anyone mention Adelphia - closing date for bids February 28?

Data sourced from Financial Times Online; additional content by WARC staff