Washington: Two top Indian-American executives were today arrested in the US for allegedly misrepresenting their company's finances to inflate its stock price.For latest news on Business & Budget 2017, like us on Facebook and follow us on Twitter.
Nandu Thondavadi, 62, CEO of Schaumburg-based Quadrant 4 System, and Dhru Desai, 55, its chief financial officer and chairman, were charged with wire fraud and certifying false financial reports related to two acquisitions and the settlement of a lawsuit against the company in 2013.
Thondavadi faces an additional charge of making false statements to the Securities and Exchange Commission in May during an investigation into the company's financial practices.
Both appeared in Chicago federal court to hear the charges, which carry a maximum penalty of 20 years each for wire fraud and certifying false financial reports.
The company also has its office in Ahmedabad, Chennai, Hyderabad and Madurai.
Quadrant 4, which launched in 2010, provides software and consulting services to health care and education customers.
The firm reported $52 million in revenues and a net loss of $516,000 for 2015, according to financial filings.
As a publicly traded company, Quadrant 4 is required to provide to the SEC on a quarterly and annual basis a detailed report of its financial condition.
Federal authorities launched an investigation of the company earlier this year based on indications that the firm's recent annual reports to the SEC contained false information, the complaint states, the Department of Justice said in a statement.
The investigation revealed that Thondavadi and Desai certified the reports even though they knew the documents did not fairly present the true financial condition of the company, according to the complaint.
Thondavadi then lied under oath when questioned by the SEC in May about some of the falsehoods, the complaint states.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)