SEC accuses iPayment’s former executives of securities violations, stealing millions

Posted by on March 11, 2017 11:23 pm
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Linus Unah – Fourth Estate Contributor

Washington, DC, United States (4E) – The U.S. Securities and Exchange Commission (SEC) has charged two former executives at a credit card processing company iPayment with masterminding a fraudulent scheme to steal millions of dollars.

The SEC said in a news release that the scheme involved using phony expense reimbursements, inflated invoices, and other improper accounting tactics.

The SEC’s complaint alleged that Westlake Village, California-based iPayment’s then-senior vice president of sales and marketing Nasir N. Shakouri and then-executive vice president and chief operating officer

Robert S. Torino routinely reimbursed themselves for payments that were never actually made to third-party vendors using their personal credit cards.

They also allegedly conspired with vendors to increase invoices and receive kickbacks from the overpayments, according to the U.S. regulator.

The three men were also accused of claiming improper commissions and bonuses related to other corporate funds they improperly diverted in various ways.

The SEC’s complaint also charges three other iPayment executives – Bronson L. Quon, John S. Hong, and Jonathan K. Skarie – with participating in the scheme.

Quon, Hong, and Skarie were allegedly rewarded for their assistance with misappropriated iPayment funds.

“As alleged in our complaint, these executives manipulated iPayment’s internal accounting systems, lied to the external auditor, and caused approximately $11.6 million in losses to the company,” Sanjay Wadhwa, senior associate director of the SEC’s New York office, said in a statement.

The SEC is seeking disgorgement of ill-gotten gains plus interest and penalties as well as officer-and-director bars.

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