Execs Allegedly Stole $11.6M From Banking Services Company

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By Andrew Ramonas

Five credit card processing company executives swiped about $11.6 million from their employer through accounting fraud, the SEC alleged in a March 10 complaint ( SEC v. Shakouri , C.D. Cal., No. 2:17-cv-01929, 3/10/17 ).

Former senior iPayment Inc. executives Nasir N. Shakouri of California and Robert S. Torino of Massachusetts were the masterminds behind the scheme that used inflated invoices, bogus expense reports and other inappropriate accounting tricks, according to a filing with the U.S. District Court for the Central District of California. The alleged fraud occurred from 2008 to 2012.

California-based iPayment assistant vice president Jonathan K. Skarie and former executives Bronson L. Quon and John S. Hong helped Shakouri and Torino hide thefts of the company’s money through falsified books and records, according to the Securities and Exchange Commission.

''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 Regional Office, said in a statement.

Lawyer Andrew Holmes of Holmes, Taylor & Jones, who is representing Hong, told Bloomberg BNA his client has reached a settlement with the SEC without admitting or denying any wrongdoing.

Lawyers for the other executives weren’t immediately available to comment.

The SEC has asked the court for the return of ill-gotten gains with interest, civil penalties and officer-and-director bars. The Justice Department also is pursuing related criminal charges against Shakouri and Torino.

To contact the reporter on this story: Andrew Ramonas in Washington at aramonas@bna.com

To contact the editors responsible for this story: Phyllis Diamond at pdiamond@bna.com; Seth Stern at sstern@bna.com

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