GenesisIntermedia Says FBI Is Investigating It

GenesisIntermedia Inc., a telemarketing company 75% controlled by Saudi arms dealer Adnan Khashoggi, indicated in a regulatory filing that the FBI is conducting a criminal investigation of the company.

The troubled company also reported a wider loss and announced plans to sell its 80,000-square-foot headquarters building in Van Nuys to raise cash.

The company said the FBI has interviewed two former employees, the first indication of a criminal probe. It gave no details.

Genesis also disclosed that the Securities and Exchange Commission has expanded its probe to whether the company made improper payments and falsified its reported assets and liabilities.

Genesis said its third-quarter loss from continuing operations widened to $103.3 million, or $4.45 a share, from $1.1 million, or 6cents, a year ago. Including discontinued operations, its loss widened to $119.7 million, or $5.16 a share, from $4.2 million, or 23 cents.

Trading in Genesis shares on Nasdaq was halted Sept. 25, when the shares were trading at $5.90.