San Jose, CA – Federal authorities have charged former CEO of HPL Technologies Inc. with wire fraud for allegedly fabricating customer orders that represented most of the software maker’s sales in the past fiscal year.
The US Attorney’s Office for the Northern District of California alleged in a criminal complaint that Yervant David Lepejian repeatedly created fake customer purchase orders then covered up the fraud by doctoring financial records and forging letters to auditors verifying the sales, reported Rueters.
In addition, the SEC said that the former chairman and CEO settled civil fraud charges for allegedly creating more than $28 million in nonexistent sales which resulted in the company overstating its revenue for FY02 by 328%.
Lepejian’s lawyer said the former CEO regretted his actions and has cooperated with the company, the SEC, and the Department of Justice.
“Mr. Lepejian founded HPL in 1987 and spent 15 years building the company,” said Attorney Michael Tubach. “His actions were the result of a terribly misguided effort to make HPL succeed rather than a desire for personal profit.”
As part of the settlement with the SEC, Lepejian agreed to an order permanently barring him from serving as an officer or director of a public company and requiring him to pay an undetermined amount in fines and penalties.