Former CEO, CFO and Vice President of Email Security Firm Charged with $ 50 Million Fraud Scheme | USAO-SDNY
Damian Williams, United States attorney for the Southern District of New York, and Michael J. Driscoll, deputy director in charge of the New York field office of the Federal Bureau of Investigation (“FBI”), today announced that ROBERT BERNARDI, founder and former CEO of Virginia-based email security company GigaMedia Access Corporation, d / b / a GigaTrust (“GigaTrust”), NIHAT CARDAK, former CFO of GigaTrust, and SUNIL CHANDRA, former vice president of GigaTrust President of Business Development, were indicted in an indictment in Manhattan federal court for participating in a scheme to defraud investors and million dollar lenders through false and misleading misrepresentation, including including fabricated bank statements and audit reports, and by impersonating a purported client, auditor, and lawyer of GigaTrust.
BERNARDI, CARDAK and CHANDRA were arrested this morning. They will later be presented to trial judge Michael S. Nachmanoff of the United States District Court for the Eastern District of Virginia. The case is referred to United States District Judge Paul G. Gardephe.
US attorney Damian Williams said: “As alleged, the defendants – the founder and other senior executives of GigaTrust – participated in a scheme to trick investors into providing the company with millions of dollars. Today’s indictment alleging a more than $ 50 million fraud scheme guarantees that they will be held accountable for their conduct. “
FBI Deputy Director Michael J. Driscoll said: “Luring investors under false pretenses and diverting their money for personal gain is exactly what the Giga Trust defendants are accused of today. The money they would have earned from this scheme amounts to tens of millions of dollars. No matter how lucrative schemes of this nature may appear from the start, they will ultimately result in federal criminal charges. ”
According to the allegations of the indictment unsealed today in federal court in Manhattan:
From 2016 or around 2016 at least to 2019, GigaTrust was a privately-held, Virginia-based company that claimed to be a leading provider of cloud-based content security solutions. BERNARDI founded GigaTrust and was its CEO, while CARDAK and CHANDRA were GigaTrust’s chief financial officer and vice president of business development, respectively. The defendants devised a scheme to defraud investors and lenders by (a) fabricating and disseminating false and deceptive bank statements that overestimated GigaTrust’s cash deposits; (b) fabricate and disseminate false and misleading audit documents allegedly issued by GigaTrust auditors and overestimating GigaTrust’s performance; (c) forge and distribute a false and misleading letter claiming to be from the New York-based board of GigaTrust; and (d) impersonate or cause others to impersonate a purported client and auditor of GigaTrust during telephone calls with a potential lender.
Specifically, BERNARDI sent fabricated audit documents to a New York-based investment firm, and BERNARDI and CARDAK used fabricated bank statements to secure several rounds of loans and investments for GigaTrust, worth of several million dollars. After a New York-based bank (“Bank-1”), which had loaned $ 25 million to GigaTrust, declared that GigaTrust had not honored the terms of its loan agreement, BERNARDI and CARDAK instigated further investments in GigaTrust, among other things, by forging a letter allegedly from the New York-based attorney for GigaTrust. Shortly thereafter, while negotiating another $ 25 million deal with a lender (“Lender-1”), BERNARDI and CARDAK devised a scheme to impersonate a GigaTrust client and auditor on calls from GigaTrust. due diligence prompted Lender-1 to issue a $ 25 million loan to GigaTrust. BERNARDI recruited CHANDRA to pose as one of GigaTrust’s alleged clients during a call with Lender-1. BERNARDI and CARDAK also fabricated bank statements and sent them to Lender-1 just before closing the $ 25 million deal.
GigaTrust filed for Chapter 7 bankruptcy protection in the District of Delaware on or about November 27, 2019.
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BERNARDI, 68, and CARDAK, 51, both of Virginia, are each charged with conspiracy to commit securities fraud, carrying a maximum sentence of five years in prison, a one count of conspiracy to commit bank fraud, punishable by a maximum penalty of 30 years in prison, one count of conspiracy to commit wire fraud affecting a financial institution, punishable by a maximum penalty of 30 years imprisonment, and one count of aggravated identity theft, punishable by a mandatory consecutive sentence of two years’ imprisonment. CHANDRA, 80, of Virginia, is charged with one count of conspiracy to commit wire fraud affecting a financial institution, punishable by up to 30 years in prison, and one count of usurpation of ‘aggravated identity, punishable by a mandatory consecutive sentence of two years’ imprisonment. The potential maximum sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any convictions of the defendants will be determined by the judge.
Mr. Williams praised the Federal Bureau of Investigation’s exceptional investigative work in this case. Mr. Williams further thanked the Securities and Exchange Commission, which has filed a civil action against the defendants, for its cooperation and assistance in this investigation.
This case is being handled by the General Crimes Unit of the Bureau. Deputy prosecutors for the United States, Peter J. Davis and Emily A. Johnson, are responsible for the prosecution.
The charges contained in the indictment are only charges, and the accused are presumed innocent until proven guilty.
 As the introductory sentence indicates, the entire text of the Indictment and the description of the Indictment set forth here constitute allegations only, and each fact described should be treated as an allegation. .