Financial Fraud: CHRISTOPHER YOUNG & JOSHUA CARLUCCI For Allegedly Conspiring to Obstruct SEC Probe into Sale of Company

<h2>Federal Grand Jury in Chicago Indicts Two Former Tech Executives For Allegedly Conspiring to Obstruct SEC Probe into Sale of Company<&sol;h2>&NewLine;<p>CHICAGO — A federal grand jury in Chicago has indicted two former executives of a Florida technology company for allegedly conspiring to obstruct an investigation by the <span lang&equals;"EN">U&period;S&period; Securities and Exchange Commission&period;<&sol;span><&sol;p>&NewLine;<div class&equals;"mh-content-ad"><script async src&equals;"https&colon;&sol;&sol;pagead2&period;googlesyndication&period;com&sol;pagead&sol;js&sol;adsbygoogle&period;js&quest;client&equals;ca-pub-9162800720558968"&NewLine; crossorigin&equals;"anonymous"><&sol;script>&NewLine;<ins class&equals;"adsbygoogle"&NewLine; style&equals;"display&colon;block&semi; text-align&colon;center&semi;"&NewLine; data-ad-layout&equals;"in-article"&NewLine; data-ad-format&equals;"fluid"&NewLine; data-ad-client&equals;"ca-pub-9162800720558968"&NewLine; data-ad-slot&equals;"1081854981"><&sol;ins>&NewLine;<script>&NewLine; &lpar;adsbygoogle &equals; window&period;adsbygoogle &vert;&vert; &lbrack;&rsqb;&rpar;&period;push&lpar;&lbrace;&rcub;&rpar;&semi;&NewLine;<&sol;script><&sol;div>&NewLine;<p><span lang&equals;"EN">CHRISTOPHER YOUNG&comma; the former President of Tampa-based <&sol;span>M2 Interactive Group Inc&period;&comma; and JOSHUA CARLUCCI&comma; M2 Interactive’s former <span lang&equals;"EN">Chief Executive Officer&comma; are charged with conspiracy to <&sol;span>obstruct&comma; influence&comma; and impede an official proceeding&period; The pair allegedly conspired with executives from Schaumburg-based Quadrant 4 System Corp&period; to obstruct an SEC investigation into Quadrant 4’s 2013 purchase of M2 Interactive&period;<&sol;p>&NewLine;<p>The indictment was returned Thursday in federal court in Chicago&period; In addition to the conspiracy count&comma; Young&comma; 35&comma; of Norwich&comma; N&period;Y&period;&comma; and Carlucci&comma; 39&comma; of Tampa&comma; Fla&period;&comma; are also charged with attempting to obstruct&comma; influence&comma; and impede an official proceeding&period; Carlucci also faces a charge of making false statements to the Federal Bureau of Investigation&period; The Court will schedule arraignments for Young and Carlucci at a later date&period;<&sol;p>&NewLine;<p>New and expanded criminal charges were also filed Thursday against the two Quadrant 4 executives&comma; NANDU THONDAVADI and DHRU DESAI&period; A criminal information filed in federal court in Chicago charged them with wire fraud&period; Arraignments for Thondavadi&comma; 63&comma; of North Barrington&comma; and Desai&comma; 55&comma; of Barrington&comma; have been scheduled for July 6&comma; 2017&comma; at 10&colon;00 a&period;m&period;&comma; before U&period;S&period; District Judge Charles Norgle&period;<&sol;p>&NewLine;<p>The charges were announced by Joel R&period; Levin&comma; Acting United States Attorney for the Northern District of Illinois&semi; and <span lang&equals;"EN">Michael J&period; Anderson&comma; <&sol;span>Special Agent in Charge of the Chicago office of the FBI&period; The Chicago office of the <span lang&equals;"EN">SEC provided valuable assistance&period;<&sol;span><&sol;p>&NewLine;<p>M2 Interactive was a technology company that developed applications for mobile devices and conducted business under the name Momentum Mobile&period; Quadrant 4 provides software products&comma; platforms and consulting services to customers in the healthcare and education sectors&period; As a public company&comma; Quadrant 4 is required to provide to the SEC a detailed report of its <a class&equals;"wpil&lowbar;keyword&lowbar;link" href&equals;"https&colon;&sol;&sol;www&period;fraudswatch&period;com&sol;tag&sol;financial-fraud&sol;amp&sol;" title&equals;"financial" data-wpil-keyword-link&equals;"linked" data-wpil-monitor-id&equals;"781">financial<&sol;a> condition&period;<&sol;p>&NewLine;<p>In 2015 the SEC launched an investigation of Quadrant 4 based on indications that the firm may have violated federal securities laws&period; The FBI initiated an investigation of Quadrant 4 in 2016&period; As set forth in the information against Thondavadi and Desai&comma; the investigation revealed that Thondavadi and Desai engaged in a wide-ranging scheme to defraud Quadrant 4’s shareholders by misappropriating more than &dollar;3 million from the company&comma; fraudulently inflating Quadrant 4’s revenue&comma; and regularly concealing Quadrant 4’s liabilities&period; The information charges that Thondavadi and Desai certified false SEC reports&comma; including Quadrant 4’s 2014 Form 10-K&comma; in which the defendants fraudulently inflated Quadrant 4’s revenue by more than &dollar;4&period;2 million – nearly 10&percnt; of Quadrant 4’s reported income that year&period;<&sol;p>&NewLine;<p><a href&equals;"https&colon;&sol;&sol;www&period;fraudswatch&period;com&sol;financial-fraud-christopher-young-joshua-carlucci-for-allegedly-conspiring-to-obstruct-sec-probe-into-sale-of-company&sol;financial-fraud-7&sol;amp&sol;" rel&equals;"attachment wp-att-53624"><img class&equals;"alignright size-medium wp-image-53624" src&equals;"https&colon;&sol;&sol;www&period;fraudswatch&period;com&sol;wp-content&sol;uploads&sol;2017&sol;07&sol;Financial-Fraud-300x104&period;png" alt&equals;"" width&equals;"300" height&equals;"104" &sol;><&sol;a>The fraud scheme also involved numerous misrepresentations related to Quadrant 4’s acquisitions&comma; including misrepresentations about the terms of Quadrant 4’s purchase of Momentum Mobile in 2013&period; Quadrant 4 purchased Momentum Mobile for &dollar;100&comma;000 in cash and 250&comma;000 shares of Quadrant 4 stock&comma; plus assumption of approximately &dollar;165&comma;000 in Momentum Mobile liabilities&comma; according to the indictment against Young and Carlucci&period; Federal authorities discovered that Thondavadi and Desai later concealed the true terms of the deal from Quadrant 4’s auditor and its shareholders&comma; according to the charges&period; The pair furnished the auditor with a fictitious agreement that Thondavadi created&comma; the charges state&period; The bogus document inflated the purchase price and failed to mention the liabilities Quadrant 4 assumed&comma; according to the charges&period;<&sol;p>&NewLine;<p>As set forth in the charges&comma; the investigation further revealed that Thondavadi and Desai attempted to obstruct the SEC’s investigation of Quadrant 4 as it related to the Momentum Mobile acquisition&period; In July 2016 SEC attorneys sought to question Young and Carlucci&comma; who were unaware of the fictitious acquisition agreement that Thondavadi created&period; Carlucci notified Thondavadi and Desai of the SEC’s inquiry&comma; and the Quadrant 4 executives responded by striking a deal with Young and Carlucci to pay them cash in exchange for their agreement to send Thondavadi an e-mail falsely stating that Momentum Mobile had previously authorized the terms of the fictitious agreement&comma; according to the charges&period; The defendants attempted to disguise the payments – &dollar;102&comma;900 to Young and &dollar;60&comma;000 to Carlucci – as &OpenCurlyDoubleQuote;consulting” fees&comma; the charges state&period;<&sol;p>&NewLine;<p>The public is reminded that charges are not evidence of guilt&period; The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt&period;<&sol;p>&NewLine;<p>The conspiracy&comma; obstruction and wire fraud charges are each punishable by up to 20 years in prison&comma; while making false statements to the FBI is punishable by up to five years&period; If convicted&comma; the Court must impose a reasonable sentence under federal statutes and the advisory U&period;S&period; Sentencing Guidelines&period;<&sol;p>&NewLine;<p>The government is represented by Assistant U&period;S&period; Attorney Matthew Madden&period;<&sol;p>&NewLine;<p><a href&equals;"https&colon;&sol;&sol;www&period;justice&period;gov&sol;usao-ndil&sol;pr&sol;federal-grand-jury-chicago-indicts-two-former-tech-executives-allegedly-conspiring">Original PressReleases&&num;8230&semi;<&sol;a><&sol;p>&NewLine;

Financial Fraud