Tech Company CEO Charged With Defrauding His Former Employer Of Over $9 Million
summary
Former CEO Suni Munshani and his brother Suresh Munshani were charged with orchestrating multiple wire fraud schemes that defrauded their former tech company of over $9 million by creating shell companies for fake services, fabricating a $3.5 million tax liability, and secretly profiting from contracts, leading to their arrest and multiple felony charges.
paragraph
Suni Munshani, former CEO of a Connecticut-based technology company, and his brother Suresh Munshani are charged with conspiring to commit wire fraud, having defrauded the company of at least $9 million between 2011 and 2020. Suni created and secretly controlled shell companies—including the Individual-1 Company and a software development firm—to receive payments for services never rendered, while also fabricating a $3.5 million non-existent tax liability to siphon additional funds; Suresh assisted by receiving and laundering proceeds through his bank account. The fraud included approximately $3 million paid to the Individual-1 Company, $2 million from the software firm, $200,000 from a licensing/reseller scheme, and an attempted $6.7 million contract, with both defendants facing up to 20 years in prison per count.
narrative
Suni Munshani, former CEO of a Connecticut-based technology company, and his brother Suresh Munshani were charged with orchestrating multiple, long-running wire fraud schemes that defrauded the company of over $9 million between 2011 and 2020. Suni secretly controlled shell companies, including the Individual-1 Company and a software development firm, using fake email accounts and undisclosed ownership to manipulate contracts and receive payments for services never rendered, totaling at least $3 million and $2 million respectively. He also fabricated a $3.5 million tax liability to justify a fraudulent company check, which he and Suresh diverted for personal gain. In a separate scheme, Suni conspired to create a licensing company and a reseller company, steering an attempted $6.7 million contract to the former and receiving at least $200,000 from the latter without disclosing his involvement. Suresh played a critical role by receiving fraud proceeds through his bank account and funneling the majority back to Suni. Both were arrested in April 2022 in Connecticut and New York, respectively, presented before a federal magistrate judge, and face multiple counts of conspiracy to commit wire fraud, each carrying a maximum 20-year prison sentence.
Classified corporate-fraud(confidence 95%). EDGAR detection: forms 10-K/10-Q/8-K· recall 56% / precision 8%. detection rule →
Statutes
15 U.S.C. § 78j(b)17 C.F.R. § 240.10b-515 U.S.C. § 80b-618 U.S.C. § 37118 U.S.C. § 134918 U.S.C. § 1956
Parties
damian williamsmichael j. driscollservices to the victim companysuni munshanisuresh munshanithe individual-1 companythe victim company
Keywords
companyvictim companymunshanivictimsuni munshanisuresh munshaniindividual- companydevelopment companysuniindividual-schemeceomillionnewcompanies
Extracted insights
Dollar amounts 6
- $9.00M $9 Million $1M–$10M
- $6.70M $6.7 million $1M–$10M
- $3.50M $3.5 million $1M–$10M
- $3.00M $3 million $1M–$10M
- $2.00M $2 million $1M–$10M
- $200K $200,000 $100K–$1M
Entities 7
- person damian williams
- person michael j. driscoll
- company services to the victim company
- person suni munshani
- person suresh munshani
- company the individual-1 company
- company the victim company
Triples 16
- Suni Munshani charged with operating multiple long-running schemes to defraud a Connecticut-based technology company of millions of dollars
- Suresh Munshani charged for his role in the fraud
- Damian Williams announced the unsealing of an indictment charging Suni Munshani
- Michael J. Driscoll announced the unsealing of an indictment charging Suni Munshani
- Suni Munshani arrested in the District of Connecticut
- Suresh Munshani arrested in the Southern District of New York
- The defendants presented before U.S. Magistrate Judge Ona T. Wang
- The case assigned to U.S. District Judge Jed S. Rakoff
- Suni Munshani was CEO of the Victim Company
- Suni Munshani caused the Victim Company to pay at least approximately $3 million dollars to Individual-1 and the Individual-1 Company
- Suni Munshani controlled the Individual-1 Company
- Suresh Munshani controlled the Individual-1 Company
- Suni Munshani created an email account purportedly controlled by Individual-1
- Individual-1 did not provide services to the Victim Company
- The Individual-1 Company did not provide services to the Victim Company
- The funds enriched Suni Munshani and Suresh Munshani
Extracted body text (6,811c)
Press Release Tech Company CEO Charged With Defrauding His Former Employer Of Over $9 Million Wednesday, April 13, 2022 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Ex-CEO’s Brother also Charged for his Role in the Fraud Damian Williams, the United States Attorney for the Southern District of New York and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing today of an indictment charging SUNI MUNSHANI with operating multiple long-running schemes to defraud a Connecticut-based technology company (the “Victim Company”) of millions of dollars. As part of the schemes, MUNSHANI and his co-conspirators created companies and then caused the Victim Company to enter into lucrative contracts with those companies, which MUNSHANI and his co-conspirators then used to siphon money from the Victim Company. SUNI MUNSHANI’s brother, SURESH MUNSHANI, who controlled a bank account used to receive fraud proceeds from the Victim Company and then returned the majority of such proceeds back to SUNI MUNSHANI, was also charged. SUNI MUNSHANI was arrested earlier today in the District of Connecticut, and SURESH MUNSHANI was arrested earlier today in the Southern District of New York. The defendants were presented this afternoon before U.S. Magistrate Judge Ona T. Wang. The case is assigned to U.S. District Judge Jed S. Rakoff. U.S. Attorney Damian Williams said: “We allege Mr. Munshani spent the better part of his seven years as CEO of a company setting up contracts with fake companies that he created and with a company in which he held an undisclosed ownership interest, and then pocketed the checks. Much of the money paid to these companies was for services that were never rendered. Not only do we allege Mr. Munshani benefited from this scheme, his brother did as well. The self-described tech entrepreneur’s pervasive fraud has landed him in federal court facing multiple felony charges.” According to the allegations contained in the Indictment and statements made during court proceedings[1]: Between 2011 and 2019, SUNI MUNSHANI, a self-described technology entrepreneur, was the CEO of the Victim Company, which provided data security services to its clients. Within six months of his appointment as CEO, MUNSHANI began an approximately seven-year scheme to defraud the Victim Company through fraudulent agreements with a purported third-party contractor (“Individual-1”) and a company purportedly controlled by that third-party (the “Individual-1 Company”). In fact, MUNSHANI and his brother, SURESH MUNSHANI controlled the Individual-1 Company. To facilitate the scheme, SUNI MUNSHANI, among other things, created an email account purportedly controlled by Individual-1 but in fact controlled by him. He then used that email account to correspond with the Victim Company concerning services purportedly rendered to the Victim Company by Individual-1 and by the Individual-1 Company. In fact, Individual-1 and the Individual-1 Company did not provide these services to the Victim Company. Nevertheless, MUNSHANI caused the Victim Company to pay at least approximately $3 million dollars to Individual-1 and the Individual-1 Company, which funds enriched SUNI MUNSHANI and SURESH MUNSHANI. In furtherance of the scheme, SUNI MUNSHANI also caused the Victim Company to issue a check for an additional approximately $3.5 million, which MUNSHANI claimed related to a tax liability of the Victim Company. In fact, no such tax liability existed and MUNSHANI, again with the assistance of SURESH MUNSHANI, also stole this money from the Victim Company. In addition, between 2013 and 2019, MUNSHANI carried out another scheme to defraud the Victim Company through services agreements between the Victim Company and a software development company (the “Development Company”). As part of the scheme, MUNSHANI obtained an undisclosed ownership interest in the Development Company and used his personal email account to assist the CEO of the Development Company (“Co-Conspirator-1”) in negotiating favorable terms in its contracts with the Victim Company. During the scheme, the Development Company transferred at least approximately $2 million to MUNSHANI. In yet another scheme, between 2018 and October 2020, MUNSHANI defrauded the Victim Company through licensing and reseller agreements between the Victim Company and two other companies (the “Licensing Company” and the “Reseller Company,” respectively). As part of the scheme, MUNSHANI conspired with others to create the Licensing Company and the Reseller Company and, without disclosing his involvement in the companies to the Victim Company, assisted the companies in their negotiations with the Victim Company. Thereafter, MUNSHANI attempted to steer an approximately $6.7 million contract to the Licensing Company, and received payments amounting to at least $200,000 from the Reseller Company. * * * SUNI MUNSHANI, 60, of Easton, Connecticut, is charged with three counts of conspiring to commit wire fraud, and SURESH MUNSHANI, 57, of Manhattan, New York, is charged with one count of conspiring to commit wire fraud. Each count carries a maximum sentence of 20 years in prison. The statutory maximum sentences are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants would be determined by the judge. Mr. Williams praised the outstanding investigative work of the FBI’s New York Office. The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Timothy V. Capozzi is in charge of the prosecution. The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty. [1] As the introductory phrase signifies, the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation. Contact Nicholas Biase Victoria Bosah (212) 637-2600 Updated April 13, 2022 Component USAO - New York, Southern Press Release Number: 22-119
OCR text (6,811c · plain-text · 99% conf)
Press Release Tech Company CEO Charged With Defrauding His Former Employer Of Over $9 Million Wednesday, April 13, 2022 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Ex-CEO’s Brother also Charged for his Role in the Fraud Damian Williams, the United States Attorney for the Southern District of New York and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing today of an indictment charging SUNI MUNSHANI with operating multiple long-running schemes to defraud a Connecticut-based technology company (the “Victim Company”) of millions of dollars. As part of the schemes, MUNSHANI and his co-conspirators created companies and then caused the Victim Company to enter into lucrative contracts with those companies, which MUNSHANI and his co-conspirators then used to siphon money from the Victim Company. SUNI MUNSHANI’s brother, SURESH MUNSHANI, who controlled a bank account used to receive fraud proceeds from the Victim Company and then returned the majority of such proceeds back to SUNI MUNSHANI, was also charged. SUNI MUNSHANI was arrested earlier today in the District of Connecticut, and SURESH MUNSHANI was arrested earlier today in the Southern District of New York. The defendants were presented this afternoon before U.S. Magistrate Judge Ona T. Wang. The case is assigned to U.S. District Judge Jed S. Rakoff. U.S. Attorney Damian Williams said: “We allege Mr. Munshani spent the better part of his seven years as CEO of a company setting up contracts with fake companies that he created and with a company in which he held an undisclosed ownership interest, and then pocketed the checks. Much of the money paid to these companies was for services that were never rendered. Not only do we allege Mr. Munshani benefited from this scheme, his brother did as well. The self-described tech entrepreneur’s pervasive fraud has landed him in federal court facing multiple felony charges.” According to the allegations contained in the Indictment and statements made during court proceedings[1]: Between 2011 and 2019, SUNI MUNSHANI, a self-described technology entrepreneur, was the CEO of the Victim Company, which provided data security services to its clients. Within six months of his appointment as CEO, MUNSHANI began an approximately seven-year scheme to defraud the Victim Company through fraudulent agreements with a purported third-party contractor (“Individual-1”) and a company purportedly controlled by that third-party (the “Individual-1 Company”). In fact, MUNSHANI and his brother, SURESH MUNSHANI controlled the Individual-1 Company. To facilitate the scheme, SUNI MUNSHANI, among other things, created an email account purportedly controlled by Individual-1 but in fact controlled by him. He then used that email account to correspond with the Victim Company concerning services purportedly rendered to the Victim Company by Individual-1 and by the Individual-1 Company. In fact, Individual-1 and the Individual-1 Company did not provide these services to the Victim Company. Nevertheless, MUNSHANI caused the Victim Company to pay at least approximately $3 million dollars to Individual-1 and the Individual-1 Company, which funds enriched SUNI MUNSHANI and SURESH MUNSHANI. In furtherance of the scheme, SUNI MUNSHANI also caused the Victim Company to issue a check for an additional approximately $3.5 million, which MUNSHANI claimed related to a tax liability of the Victim Company. In fact, no such tax liability existed and MUNSHANI, again with the assistance of SURESH MUNSHANI, also stole this money from the Victim Company. In addition, between 2013 and 2019, MUNSHANI carried out another scheme to defraud the Victim Company through services agreements between the Victim Company and a software development company (the “Development Company”). As part of the scheme, MUNSHANI obtained an undisclosed ownership interest in the Development Company and used his personal email account to assist the CEO of the Development Company (“Co-Conspirator-1”) in negotiating favorable terms in its contracts with the Victim Company. During the scheme, the Development Company transferred at least approximately $2 million to MUNSHANI. In yet another scheme, between 2018 and October 2020, MUNSHANI defrauded the Victim Company through licensing and reseller agreements between the Victim Company and two other companies (the “Licensing Company” and the “Reseller Company,” respectively). As part of the scheme, MUNSHANI conspired with others to create the Licensing Company and the Reseller Company and, without disclosing his involvement in the companies to the Victim Company, assisted the companies in their negotiations with the Victim Company. Thereafter, MUNSHANI attempted to steer an approximately $6.7 million contract to the Licensing Company, and received payments amounting to at least $200,000 from the Reseller Company. * * * SUNI MUNSHANI, 60, of Easton, Connecticut, is charged with three counts of conspiring to commit wire fraud, and SURESH MUNSHANI, 57, of Manhattan, New York, is charged with one count of conspiring to commit wire fraud. Each count carries a maximum sentence of 20 years in prison. The statutory maximum sentences are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants would be determined by the judge. Mr. Williams praised the outstanding investigative work of the FBI’s New York Office. The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Timothy V. Capozzi is in charge of the prosecution. The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty. [1] As the introductory phrase signifies, the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation. Contact Nicholas Biase Victoria Bosah (212) 637-2600 Updated April 13, 2022 Component USAO - New York, Southern Press Release Number: 22-119