Call it the get-'em-when-they're-down defense. The former KB Home CEO, charged with 20 counts of fraud and making false statements in connection with backdating stock options, is now accusing federal prosecutors of manipulating witnesses. Karatz's lawyers say that a planned defense witness dramatically changed his account after meeting with prosecutors and FBI agents. Normally, these kinds of claims wouldn't be taken that seriously so close to the trial date (Feb. 23), but the feds haven't exactly had great success in these backdating cases. Last month, a federal judge in OC threw out charges against Broadcom co-founders Henry Samueli and Henry T. Nicholas III because he said prosecutors had improperly pressured witnesses. Bingo. (LAT)

Karatz with Lilly Tartikoff