Damian Williams, america Lawyer for the Southern District of New York, introduced that ADAM ROGAS, the co-founder and former CEO, CFO, and member of the board of administrators of a Las Vegas-based cyberfraud prevention firm NS8, Inc. (“NS8”), was sentenced as we speak in Manhattan federal courtroom to 5 years in jail for participating in securities fraud by creating and utilizing fraudulent monetary knowledge to acquire over $123 million in financing for NS8, of which he personally obtained roughly $17.5 million. ROGAS pled responsible on March 16, 2022, earlier than United States District Choose John P. Cronan, who imposed as we speak’s sentence.
U.S. Lawyer Damian Williams stated: “Adam Rogas took the ‘fake-it-till-you-make-it’ saying to a prison excessive. Whereas claiming to be within the fraud prevention enterprise, Rogas himself faked practically all of his firm’s prospects, income, and belongings. In doing so, he defrauded traders out of over $100 million. Now Rogas will report back to jail to be held accountable for his fraudulent scheme.”
In handing down ROGAS’s sentence, Choose Cronan characterised the defendant’s fraud as “brazen, calculated, and long-running.”
In response to the Criticism, Indictment, different publicly filed paperwork, and statements made in courtroom:
ADAM ROGAS was a co-founder of NS8 and served as its CEO, CFO, and as a member of its board of administrators. ROGAS was additionally primarily liable for the corporate’s fundraising actions. NS8, which was based mostly in Las Vegas, Nevada, was a cyberfraud prevention firm that developed and offered digital instruments to assist on-line distributors assess the fraud dangers of buyer transactions. Within the fall of 2019 and the spring of 2020, NS8 engaged in fundraising rounds by which it issued Sequence A Most well-liked Shares and obtained roughly $123 million in investor funds. ROGAS used the materially deceptive monetary statements to lift these funds.
Particularly, ROGAS maintained management over a checking account into which NS8 obtained income from its prospects and periodically offered month-to-month statements from that account to NS8’s finance division in order that NS8’s monetary statements may very well be created. ROGAS additionally maintained management over spreadsheets that purportedly tracked buyer income, which had been additionally used to generate NS8’s monetary statements.
Throughout the fundraising course of within the fall of 2019 and spring of 2020, ROGAS altered the financial institution statements earlier than offering them to NS8’s finance division to indicate tens of hundreds of thousands of {dollars} in each buyer income and financial institution balances that didn’t exist. Within the interval from January 2019 by February 2020, between not less than roughly 40% and 95% of the purported complete belongings on NS8’s stability sheet had been fictitious. In that very same interval, the financial institution statements that ROGAS altered mirrored over $40 million in fictitious income. ROGAS additionally falsified practically all of NS8’s purported prospects on inner monitoring spreadsheets.
Moreover, ROGAS offered the falsified financial institution information he had created to auditors who had been conducting due diligence on behalf of potential traders. After these fundraising rounds concluded, NS8 performed a young supply with the funds raised from traders, and ROGAS obtained $17.5 million in proceeds from that tender supply, personally and thru an organization he managed. After ROGAS’s fraud was uncovered, NS8 in the end entered chapter proceedings. ROGAS used his fraudulent proceeds to buy, amongst different issues, luxurious items and a residence within the Dominican Republic.
* * *
Along with his jail time period, ROGAS, 45, of Las Vegas, Nevada, was sentenced to a few years’ supervised launch and ordered to forfeit $17,542,259.
Mr. Williams praised the excellent investigative work of the FBI on this investigation. Mr. Williams additional thanked the Securities and Trade Fee for its cooperation and help on this investigation.
This case is being dealt with by the Workplace’s Securities and Commodities Fraud Activity Power. Assistant U.S. Attorneys Richard Cooper and Jared Lenow are accountable for the prosecution.
