$123 Mln Fraud Scheme Against Investors Gets Cyber Anti-Fraud Firm CEO Arrested
ZDNet reports that the CEO of NS8, an anti-cyber fraud company, has been taken into custody for defrauding the company's investors of $123 mln.
Charges against him have already been made by the Department of Justice and the U.S. SEC.
Raising $123 mln from Lightspeed
According to statements made by the U.S. Department of Justice (DoJ) and the U.S. SEC, on Sept. 17, Adam Rogas was taken into police custody in Las Vegas.
The person in question is the CEO and co-founder of NS8—a company offering services for the detection and prevention of cyber fraud using its intelligence-driven platform.
The startup raised $123 mln in an investment round from Lightspeed Venture Partners and AXA Venture Partners.
Defrauding your own investors
U.S. prosecutors say that the startup CEO has been tampering with bank statements and manipulating financial spreadsheets for a while without the knowledge of the company's investors.
Rogas was able to access the company's bank account, in which its customers' payments were deposited.
Apart from that, according to the DoJ, the CEO faked tens of millions of USD in client revenue and bank balance figures from 2019 to February of this year.
Thus, he managed to fake between 40 and 95 percent of these financial statements, and it was those documents that the CEO showed to the company's investors.
It was thanks to these falsified revenues, which never existed in reality, that investors decided to part with the aforementioned $123 mln. Adam Rogas put $17.5 mln in his own pocket.
Yuri MolchanCharges and imprisonment prospects
Rogas is now facing up to 20 years in jail for the charges of securities and wire fraud. Fraud in securities offers and sales may bring him another five years of imprisonment.
In addition, the SEC insists that he face injunctions and fines and that his assets be frozen.
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