New York, July 1 : Two top Indian-American former executives of a Chicago-area information technology company have been charged by the US federal regulator in an accounting fraud scheme in which they misled investors and siphoned millions of dollars from the firm for their personal benefit.
Nandu Thondavadi, 63, of Illinois was the CEO of Schaumburg-based Quadrant 4 System Corporation (QFOR) while Dhru Desai, 55, was its chief financial officer.
The Securities and Exchange Commission (SEC) has charged the duo as well as Quadrant 4 System in the accounting fraud scheme.
The SEC’s complaint, filed on Friday in the US District Court for the Northern District of Illinois, alleges that Thondavadi and Desai siphoned off more than USD 4 million from the company over a nearly five-year period.
The former executives are also alleged to have caused the company to understate its liabilities and inflate its revenues and assets, evading scrutiny by lying to the company’s auditors and providing them with forged and doctored documents.
Both were earlier arrested on December 1 last year in the US for allegedly misrepresenting their company’s finances to inflate its stock price.
According to the SEC’s complaint, the alleged scheme continued until November 2016, when Thondavadi and Desai were arrested and criminally charged with fraud. QFOR announced their resignations in December 2016 and disclosed that the company’s financial reports could no longer be relied upon and required a restatement.