Cyber-fraud Prevention Company CEO Charged with Fraud

The CEO of a cyber-fraud prevention company has been arrested and charged with fraud.

Adam Rogas is accused of using fraudulent financial data to obtain over $123m in financing for Las Vegas–based tech company NS8 and pocketing $17.5m of the cash for himself. 

The 43-year-old Las Vegas resident was arrested yesterday in the District of Nevada, where he is expected to appear before a judge today. 

The accused is a co-founder of NS8 and served as its CEO, CFO, and a member of its board of directors. Rogas also had primary responsibility for the company’s fundraising activities.  

In a statement released yesterday, FBI Assistant Director William F. Sweeney Jr. said: “It seems ironic that the co-founder of a company designed to prevent online fraud would engage in fraudulent activity himself, but today that’s exactly what we allege Adam Rogas did."

A complaint unsealed today in Manhattan federal court alleges that Rogas provided NS8's finance department with bank statements that had been altered to show tens of millions of dollars in both customer revenue and bank balances that did not exist. 

"In the period from January 2019 through February 2020, between at least approximately 40% and 95% of the purported total assets on NS8’s balance sheet were fictitious," stated the United States Department of Justice yesterday. "In that same period, the bank statements that Rogas altered reflected over $40 million in fictitious revenue."

In the fall of 2019 and the spring of 2020, Rogas allegedly used this fictitious revenue in fundraising rounds through which NS8 issued Series A Preferred Shares and obtained approximately $123m in investor funds.

NS8 conducted a tender offer with the funds raised from investors. Rogas received $17.5m in proceeds from that offer, personally and through a company he controlled.

Rogas is further accused of supplying falsified bank records to auditors that conducted due diligence on behalf of potential investors. 

He is charged with one count of securities fraud, one count of fraud in the offer or sale of securities, and one count of wire fraud. If convicted, he could be sentenced to up to 45 years in prison.

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