In the slogan yes Today’s announcement by the U.S. Attorney’s Office for the Southern District of New York says it all: “Adam Rogas allegedly raised $ 123 million from investors using financial statements showing tens of millions of dollars in income and assets that did not exist.”
Rogas, the co-founder and former chief executive and chief financial officer and board member of the Las Vegas-based fraud prevention society, NS8, he was arrested by the Federal Bureau of Investigation and in Manhattan court earlier today on charges of security fraud, fraud in the sale of security and fraud.
Last week, the company laid off hundreds of staff as reports of an investigation by the Securities and Exchange Commission emerged, according to a report in Forbes.
“This is a rapidly evolving situation,” Lightspeed Ventures told Forbes in a statement. “We are shocked by the news and have taken steps to inform our LPs. It would be premature to comment further at this time.” Lightspeed Ventures he helped lead the $ 123 million NS8 A series in June. Other investors include Edison Partners, Lytical Ventures, Sorenson Ventures, Arbor Ventures, Hillcrest Venture Partners, Blu Venture Investors and Bloomberg Beta, for Crunchbase data.
The accusations are, indeed, shocking.
“As alleged, Don’t ask Adam it was the proverbial fox that guarded the chicken coop, “said Audrey Strauss, the New York Southern District Attorney in office.” While collecting more than $ 100 million from investors for his fraud prevention company, Rogas himself he himself had engaged in a brazen fraud. Rogas’ current arrest ensures that he will be held accountable for his alleged scheme. “
Presumably, while Rogas checked bank accounts and spreadsheets detailing his transactions with customers, he cooked up books to show millions in transactions that did not exist.
From January 2019 to February 2020, the FBI claimed that between 40% and 95% of the total assets alleged in the NS8 balance sheet were fictitious, according to the statement. Over the same period Rogas changed bank statements to reflect $ 40 million in revenues that simply weren’t there, according to the Justice Department’s allegations.
At the bottom of these false financial data, NS8 has failed raises more than $ 120 million from some top-tier investment firms, including Lightspeed Venture Partners and AXA Ventures.
Rogas was able to understand not only the investment firms, but the auditors who did the due diligence on their own account. After the tour was completed, NS8 made a secondary offer, which allowed Rogas to drop $ 17.5 million through personal sales and through a company he controlled, according to the statement. DOJ.
“It seems ironic that the co-founder of a company designed to prevent online fraud is engaging himself in fraudulent activity, but today is exactly what we say Adam Rogas did. Rogas has allegedly raised millions of dollars from investors based on fictitious financial statements, and in the end he left with nearly $ 17.5 million of that money, “said William F. Sweeney Jr., assistant director of the FBI.” Fraud cases remain among the our top priority. We have seen too many examples of unscrupulous actors engaged in this type of criminal activity, and we continue to work diligently to eliminate this behavior whenever and wherever we find it. ”