Witnesses say investigators for the Manhattan District Attorney raided Newsweek’s offices on Thursday and removed 18 computer servers. The move is said to be part of a long-running investigation into the company’s finances.
Armed with a search warrant, the probers took photographs and gathered information about the servers and their capacity. Sources also say that throughout the day, the investigators were seen closely examining the equipment inside the server room.
The investigators were seen removing the servers and loading them onto a cart and into a freight elevator of the company’s lower Manhattan offices at around 4 p.m.
The servers taken by the investigators were not currently being used by the media organization. Newsweek’s working servers remain operational in the company’s building even after the probers left.
The publication’s parent company, Newsweek Media Group issued a statement Thursday evening and said: “No information regarding the company’s content, stories, personnel, or sources was given and Newsweek Media Group has been assured by the DA’s office that the investigation is not about any content-related issues.”
Newsweek Media Group, formerly known as IBT Media, has been under a grand jury investigation for at least 17 months. A source says the investigation is likely looking at loans the company took to finance the purchase of the servers.
The company has always had a rocky financial history. Digital start-up IBT Media bought Newsweek from internet and media company IAC in 2013. It missed payroll and laid off huge numbers of employees in 2016.
The IBT founders Etienne Uzac and Jonathan Davis who bought Newsweek in 2013 and still own parts of Newsweek Media Group are also facing debt woes. Public records reveal that the Internal Revenue Service filed a $1.2 million lien against Uzac in December, while IRS also filed an $800,000 lien against Davis in October.
Still, managers and staffers were shocked with the raid on Thursday, coming as it does in the middle of an aggressive expansion and a hiring boom.
The Manhattan DA’s office declined to comment on the matter.
One agent was heard reassuring worried employees during the raid: “Nobody’s going to jail. Your magazine’s going to be fine. Newsweek has been here for a long time. It’s going to be here for a long, long time.”