The Smoking Gun has the complaint filed in US District Court against Mathias Guerrand-Hermès, who was arrested on a flight from Paris to New York on Tuesday for attacking the crew and grabbing the pilot's crotch. [TSG, previously]

Remember former Tyco chief Dennis Kozlowski, the face of corporate greed circa 2004? An appeals court this morning upheld the convictions of Kozlowski along with his former financial chief, Mark Swartz, both of whom remain in prison serving out sentences for fraud. [Reuters, WSJ]

The sexual assault lawsuit filed late last year by 24-year-old transgendered aspiring model Maximilia Cordero against financier (and imprisoned massage aficionado) Jeffrey Epstein was dismissed by a judge this morning. Treat yourself to an extra candy bar at the commissary today, Jeff! [NYO]

Mathias Guerrand-Hermès, an heir to the French fashion house (and the ex-husband of the socialite Valesca Guerrand-Hermès), was arraigned today on charges he assaulted an Air France captain on a flight from Paris on Tuesday and then tried to grab the pilot's crotch and punch him. It took four people to subdue him and he spent the rest of the trip shackled to a seat in the first-class compartment. The polo-playing real estate investor could face a 20-year prison sentence if he's convicted, although given he has no criminal record, he isn't expected to do much hard time. Consider this a reminder not to mix your prescription medication with alcohol at 30,000 feet. [NYT/City Room]

John McCain's bill to protect the children — Keeping the Internet Devoid of Sexual Predators Act of 2008 (KID SPA!) — has been signed by President Bush. According to an episode of Schoolhouse Rock my boss used to watch, that means it's a law. KIDSPA is based on a half-baked idea by MySpace to create a national database to track registered sexual predators' email addresses. At least now you don't have to wait for version 2.0 for fewer pedophiles. [Wired]

So the New York Times has a great story on Barack Obama's shady illegal fundraising. Because the system is utterly broken and Obama is taking advantage of that fact to win this election. His unprecedented fundraising is democracy at its worst! Of course millions in donations from thousands of random people is not so bad, and McCain's taking advantage of the GOP bundling system that Bush developed which is really just a laundering service. Still, hey, lots of people are donating way more than is legal to Obama's campaign and that campaign is maybe not being as vigilant about checking up on this as they should be. Though honestly this story is primarily an excuse to print the funny fake names and occupations of these mysterious illegal donors:

If your company ever gets into serious trouble, wouldn't you like to know your lawyer's standing behind you publicly? Better hope you're not represented by Wilson Sonsini, then. After Seattle software startup Entellium saw its CEO and CFO charged with wire fraud and cooking the company's books, Entellium disappeared from Wilson Sonsini Goodrich & Rosati partner Craig Sherman's list of clients. Google's cache shows Entellium was on the list as recently as last Friday. Sherman still represents Ignition Partners, a prominent VC firm which claims Entellium's top execs defrauded it. We'll give Sherman and Wilson Sonsini credit for good financial judgment: Ignition still has money, while authorities are investigating what happened to the $50 million Entellium raised from Ignition and others

$50 million of venture capital down the drain. A fraudulent set of books, going back to 2004. How did this happen? Entellium, a Seattle-based software company, saw CEO Paul Johnston and CFO Parrish Jones resign, days before the two were charged with wire fraud. What no one has explained: How on earth were the two executives able to get away with overstating the company's revenues to investors by a factor of four?Ignition Partners, which put in $19 million of the $50 million in venture capital, is playing dumb, insisting it never would have invested had it known the company's true financial condition. But Entellium, which started in Malaysia in 2000, was trouble from the start. It went through a period, after the popping of the bubble, when employees went unpaid. Since then, it attracted investments from Ignition and others, including Intel Capital, West River Capital, Sigma Ventures, and Mavcap, a Malaysian venture fund. Are we to believe that all of these investors committed their limited partners' money without a thorough audit? Silicon Valley Bank, a tipster tells us, loaned Entellium millions of dollars and acted as the company's bank. It examined the company's books quarterly for the past three years — part of the normal loan-review process — and surely was aware of how much money was flowing into its accounts — or rather, not flowing in. Montgomery Securities and Cascadia Capital helped Entellium raise money. Were they, too, deceived as to the company's financial condition when they presented venture capitalists with its numbers? It is possible that Johnston and Jones are very clever fellows. But a scenario where they simply got away with defrauding every financial institution they dealt with beggars belief. The alternative scenario: That at least some of Entellium's backers were aware of the fraud, and invested in the hope that it would become someone else's problem soon enough.

Here's an inventive business model: When you're not actually making money, try making it up. The former CEO and CFO of Entellium, a software startup in Seattle, have been charged with wire fraud after an employee found the company keeping a cooked set of books for its investors. Paul Johnston, the CEO, and Parrish Jones, the CFO, resigned abruptly last month. 40 of the company's 60 employees in Seattle were laid off, having been told that the "money ran out." Or ran away: Authorities are trying to find where the company's $50 million in venture capital went.Entellium, an online customer-relationship management software company which competed — not very well, it turns out — with the likes of Salesforce.com and NetSuite, had raised that $50 million from venture capitalists, including Ignition Partners, a high-profile firm founded in part by former Microsoft executives. Ignition had invested $2 million as recently as April. The company told investors it had taken in $15.5 million since 2006. The real number: $3.8 million. Johnston, in his resignation email, said that he had started overstating revenues almost as soon as the company was founded in 2004. Barry Abraham, a former executive and shareholder, wonders why investors never conducted an audit. His explosive charge: Abraham claims the board knew of the fraud, but hoped Entellium's real business would become someone else's problem before it was discovered. In fact, Entellium floated talk of a sale to Avidian, another Seattle-area software company, shortly before the charges were unveiled. In the complaint filed by prosecutors, Ignition's board members say they never would have invested had they known the real state of Entellium's finances. Would anyone be surprised to hear that the rest of Ignition's portfolio companies now have audits scheduled?

The twenty-year-old son of Tennessee state representative Mike Kernell, a Democrat, plead not guilty today at a federal court in Knoxville. Prosecutors had charged David Kernell with breaking into GOP vice presidential candidate Sarah Palin's email by guessing the answers to her password-recovery answers, and then posted her new password, "popcorn," on 4chan. A judge released Kernell without bail, but forbid him to own a computer or to use the Internet for anything other than email and classwork. Compared to Kevin Mitnick's eight-year ban from the Internet, that's a decree as level-headed as it is unenforceable.

The dumb kid who guessed Sarah Palin's Yahoo Email "security questions" and then posted her password on 4Chan has finally been indicted! David Kernell, 20, turned himself into federal authorities today. According to the indictment, Kernell "intentionally and without authorization accessed a protected computer by means of an interstate communication and thereby obtained information." This apparently comes with a maximum 5 years in prison and a $250,000 fine, should he be found guilty. We still think Yahoo should be indicted for having such dumb security questions. Also: "interstate communication"! Devious! [KnoxNews]

Ha ha, just kidding. The plucky Alaska Maverick is just inspiring death threats, not inciting them! At a rally held earlier this week in 1938, Palin accused Barack Obama of "palling around with terorrists." At that, a man in the crowd shouted "kill him!" Turns out you are not allowed to shout "kill him" in reference to a nominee for president. So the Secret Service totally promises to investigate! If they can find the guy and verify that he said "kill him" and not "boo-urns." Get your alibi in order, Lieberman! [Radar]

As if 60 Minutes correspondent Lara Logan hadn't kicked up enough dirt in Iraq — she supposedly broke up a marriage and caused a lovers' brawl — she's now under investigation by the feds for looting. A reporter for Broadcasting & Cable somehow got into Logan's CBS office with a camera, and lo and behold, found some serious war spoils, including a two portraits of Saddam Hussein that Logan picked up from wrecked buildings. The authorities have already gone after other TV journalists for taking home souvenirs, which is, as ERS News noted, illegal under Iraqi law, so it was a bit dumb of Logan to let anyone into her office with camera. But then nothing screams "I am a hardened war reporter" like an ornament from inside enemy territory. And by Logan's standards this is a fairly low-grade scandal. Heck, by the standards of Iraqi looting it's a low-grade scandal. But it involves a pretty TV lady, so maybe try and get outraged by the clip after the jump.

Weird "billionaire" "financier" Jeffrey Epstein is in jail right now, for soliciting prostitution. The guy loved sexy massages from underaged girls, and so his jet-set lifestyle is now a bit less jet-setty. No more private planes and hanging out with Kevin Spacey. But prison's not so terrible! The Smoking Gun reports: "During his first three months in jail, the 55-year-old massage enthusiast has spent about $1250 on a wide variety of snacks (moon pies, BBQ chips, cheddar cheese squeezers) and skin care products (Lubriderm, hand lotion, and petroleum jelly)." Attached: one of his commissary receipts! Epstein seems to be buying a lot of extra things, presumably for use as barter. Because of the stock market, you know. And because of prison. [TSG]

Financier Jeffrey Epstein has spent the last three months sitting in a jail cell in Palm Beach, serving out an 18-month sentence for hiring underage girls to perform "erotic massages." But he isn't lacking creature comforts! The Smoking Gun was thoughtful enough to file a Freedom of Information Request to secure his commissary receipts, which means you now can review every single thing Jeff has purchased since he checked into the big house. It's a 12-page list and includes tasty delights like Lil' Chub Sausage, Ms. Vickie's Salt & Vinegar potato chips, O'Brien's Hickory Smoked Beef, Teriyaki Meat Sticks, and Instant Spanish Rice.

Congress has passed a bill compelling registered sex offenders to submit "email addresses, instant message addresses and other identifying Internet information" to law enforcement. The legislation is sponsored by John McCain, who is not uncoincidentally running for president. The bill, which has passed both houses of Congress and is expected to be signed into law by Bush, aims to protect children from sexual advances on social network sites. Facebook, MySpace, and others are meant to cross-check their user databases with the federal list, and, in the parlance of these types of laws, "delete online predators." But these bills are so broken from the start: what's to keep a past sex offender from just using multiple online identities? Oh, and then there's that whole sticky issue of protecting freedom of speech for those who've served their criminal sentences. Courts in Utah — yes, that Utah — have just ruled on that, providing bad news for those who supported the McCain bill.After a challenge to a similar state law in Utah last week, a federal judge restored a sex offender's right to anonymous speech online. Though the judge stated that this decision should not apply unilaterally to all registered sex offenders, her ruling is the first to question the conventional wisdom: that curbing online speech can curb sex crimes. Free speech advocates and social network analysts have long been claiming that this approach won't work. First, there's the problem of the expansive definition of "sex crime" — from violent assault to public nudity. On that basis, Flickr has at least one employee who, after bending over bare-assed for his colleagues, could be banned from the Internet. Add to that that state and Federal lawmakers still can't seem to grasp the qualitative difference between a sixteen year old flashing her boycrush and a fifty year old posing as the same sixteen year old. Toss with a little bit of election-year mania about being tough on crime, and you get a botched bill that may only drive sex offenders further from the public eye — the opposite of the safer, happier Internet McCain hoped to create. (Photo by soggydan)

David Letterman naturally wanted some dish last night on Anne Hathaway's train-wreck of a relationship with Rafaello Follieri, the Italian con-man doing time for fraud, conspiracy and money laundering. He had complimented her at length, agreed to show her clip and phrased his questions politely. But the starlet became exasperated only one-minute into the good stuff. "I'm just kind of promoting my movie," she said. Ha ha ha, um, no. You don't get to sweep the imprisoned swindler ex under the rug. And no one cares about the movie anyway. By getting testy — at one point Hathaway asked Letterman, "Do you want to know his shoe size, too?" — Hathaway is just keeping the issue hot and herself entangled in Follieri's scandal even longer. Cringe at her battle with reality in the attached video (click the thumbnail to watch).

Mary-Kate Olsen successfully avoided interrogations from both the New York police and Drug Enforcement Administration over the death of her friend Heath Ledger. Authorities were said to be curious over why the wee celebrity dispatched her bodyguards to the movie star's apartment after she learned he was lifeless instead of calling 911. Were they hiding drugs? Now Ledger's insurance company, owned by Dutch conglomerate ING, is calling Ledger's death "suspicious" and seeking to take its own crack at the starlet, the Post reported. At stake is $10 million for Ledger's daughter Matilda. Will Olsen finally cave?

Timothy Biro, managing partner at Cleveland's Ohio Innovation Fund, is facing vehicular homicide charges after running over bicyclist Terrell Jones who later died at a Cleveland hospital Wednesday night. When police stopped Biro and informed him of the accident, Biro told officers he thought he'd hit a pothole. Biro is being held in jail while awaiting a court appearance this morning. [Cleveland Plain Dealer]

Michael Lauer, the hedge fund manager accused of stealing hundreds of millions of dollars from investors (part of which he spent on a plane and a race car), has been found guilty of fraud. Good news if you're thinking about bidding on his dilapidated estate in Connecticut, which will be auctioned off by the government on Friday: Lauer may spend up to 20 years behind bars, so you won't have to worry about him showing up at the front door looking for a place to crash. [Reuters]