SEC Charges iPayment Executives with Fraud
On March 10, 2017, the Securities and Exchange Commission (“SEC”) charged two former iPayment executives, a credit card processing company, with masterminding a fraudulent scheme to steal millions of dollars through phony expense reimbursements, inflated invoices, and other improper accounting tactics.
The SEC’s complaint alleges that iPayment’s then-senior vice president of sales and marketing Nasir Shakouri and then-executive vice president and chief operating officer Robert Torino routinely reimbursed themselves for payments that were never actually made to third-party vendors using their personal credit cards. They also allegedly conspired with vendors to inflate invoices and receive kickbacks from the overpayments, and claimed improper commissions and bonuses related to other corporate funds they improperly diverted in various ways.
The SEC’s complaint also charges three other iPayment executives – Bronson Quon, John Hong, and Jonathan Skarie – with participating in the scheme and helping Shakouri and Torino falsify books and records to hide the thefts of corporate funds. Quon, Hong, and Skarie were allegedly rewarded for their assistance with misappropriated iPayment funds.
“As alleged in our complaint, these executives manipulated iPayment’s internal accounting systems, lied to the external auditor, and caused approximately $11.6 million in losses to the company,” said Sanjay Wadhwa, Senior Associate Director of the SEC’s New York Regional Office.
In a parallel action, the U.S. Attorney’s Office for the Central District of California announced criminal charges against Shakouri and Torino.
The SEC is seeking disgorgement of ill-gotten gains plus interest and penalties as well as officer-and-director bars.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, or [email protected]. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
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