CEO of anti-fraud company charged with fraud

| Sep 25, 2020 | White Collar Crimes

A 43-year-old man who founded and once served as the chief executive officer of a company that promised to protect its clients against internet fraud has been accused of using falsified financial statements to bilk investors out of more than $100 million. Papers filed in a Manhattan federal court reveal that the Las Vegas resident has been charged with wire fraud, securities fraud and fraudulently offering or selling securities. He faces up to 45 years in federal prison if he is convicted on all three counts. The charges were announced on Sept. 17 in a press statement released by the U.S. Attorney’s Office for the Southern District of New York. The FBI investigated the case.

Spreadsheets doctored

According to federal prosecutors, the man began altering company documents in late 2019. He is alleged to have added fictitious revenue streams to spreadsheets and other documents to make the business seem more attractive to potential investors. The scheme is said to have helped the company raise about $123 million. Prosecutors say that the man pocketed approximately $17.5 million of the raised funds.

Coworkers uncover scheme

Law enforcement learned about the alleged scheme in August 2020 when they were contacted by some of the man’s coworkers. They told federal agents that they discovered the irregularities when they checked company bank accounts and found that they contained tens of thousands of dollars. Company documents indicated that the accounts should have contained tens of millions of dollars. When questioned about the shortfall, the man allegedly arranged for a meeting with his coworkers. They contacted the authorities when he failed to show up.

Mounting a defense against fraud charges

Cases involving white-collar crimes like wire and securities fraud are usually complex, and federal agents often try to gather additional evidence during suspect interviews. Criminal defense attorneys with experience in this area may urge individuals suspected of committing federal crimes to retain legal representation before agreeing to such an interview. This is because misleading federal law enforcement can lead to additional charges and jail time.

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