Niel has been sentenced. See Update in my second post.
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I am glad I could find something in English for this:
(From Easybourse.com)
Iliad Founder Xavier Niel Faces Embezzling Charges
Vendredi 15 septembre 2006 / 11h11
PARIS -(Dow Jones)- The founder of one of France's most successful internet companies, Xavier Niel, went on trial this week for embezzling funds from a sex shop in the city of Strasbourg.
Niel is the founder and chief executive of Iliad SA (403591.FR), which has made its mark by offering low cost triple play services including internet, telephone and television connections.
Iliad is now the second largest broadband provider in France. The company declined to comment on the court hearing.
The trial started Thursday and is being held in Paris at the chambre de tribunal correctionnel. It will last until Sept. 21.
Niel is accused of embezzling EUR5,000 a month from the sex shop over the past three years.
--Nina Sovich, Dow Jones Newswires
The trial is now going on, but strangely there is nothing in English about it yet (all the other recent articles are about Niel's technological and financial achievements).
This is about more than sex shops. According to this Libération article, Niel, the founder of successful service provider Free, has had a sex trade operation (pornographic websites, online sex shops, but also "real life" peep shows), on the side for twenty years, as a source of "easy money". This is something he has always tried to keep secret (in the media, he would only accept questions about his activities as ISP), but his reputation as a "porn king" has barred him from getting positions in other societies.
His associate, Fernand Develter, is also charged for proxenetism: the Strasbourg establishment, the "Sex-Shop X Live Peep-Show", used the dancers as prostitutes. Develter has admitted that he once asked a dancer for fellatio, but he claims that he wanted merely to "verify the rumours"; the dancer, who refused to comply, retorted that this seemed to be quite a common practice for Develter.
The reason Niel did not share those charges is that he never went to that place. Taking the money was all right as long as he could pretend to ignore what was going on.
This case also proves, once again, that the distinction between online and offline sex trade is a diversion, just like the insistence on separating pornography from prostitution.
Edited to add: Free, and now Iliad's most successful product is their DSL box, the "FreeBox". I can't tell you how many times I've heard the joke "yeah, more like 'Free Boxon'" on the radio this week ('boxon' is slang for 'brothel').