Ex-Netflix exec accused of taking kickbacks

A former Netflix executive has been charged with accepting hundreds of thousands of dollars in kickbacks from tech companies seeking deals with the video-streaming company.

Michael Kail pleaded not guilty to multiple counts of fraud and money laundering Tuesday in federal court in San Jose and was released on $200,000 bond. The criminal charges come in the wake of a civil suit by Netflix against Kail over similar allegations. The suit was settled out of court.

Kail, 49, of Los Gatos, worked for Netflix from 2011 until August 2014 and was vice president in charge of the company’s information technology department. He was then hired by Yahoo as chief information officer, left in 2015 after Netflix sued him, and then started his own software security company, Cybric.

Prosecutors said that between February 2012 and July 2014, Kail received more than $500,000 from at least three companies, and accepted valuable stock options from other firms. In exchange, prosecutors said, he approved millions of dollars’ worth of contracts for goods and services from those companies. None of those companies has been charged in the case.

Kail deposited the payments with a company he created, Unix Mercenary LLC, and used them to pay personal expenses and buy a home in Los Gatos, prosecutors said.

Kail’s lawyer, Joseph Ainley, said Wednesday that his client denies guilt and expects to be vindicated at his trial.

“As a known technology leader in the Silicon Valley, Mr. Kail frequently advises cutting-edge startups on nextgeneration technology,” Ainley said. “This indictment is unfounded and takes direct aim at the spirit of innovation and entrepreneurship that makes the valley such a vital part of the economy.”