Andrew McKelvey, former Monster Worldwide chief executive officer, charged with securities fraud and conspiracy in connection with the backdating of seven years of employee stock option grants, no longer faces prosecution because he is terminally ill.

The backdating, according to the indictment resulted in more than $US300m (₤153.4m) of inflated earnings for the recruitment giant through the understatement of compensation expenses. The government said McKelvey had accepted responsibility for his participation in the scheme, CFO.com reports.

In light of McKelvey’s poor health, the government agreed to defer his prosecution, according to a statement from Michael Garcia, US attorney for the Southern District of New York. Under the deferral agreement, the charges will be dismissed after 12 months if McKelvey abides by the terms of the agreement.

In addition to accepting responsibility of his crime, the former Monster boss agreed to pay $US276,000 to settle civil charges with the Securities and Exchange Commission in connection with the backdating scandal.

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