The former chief executive officer of email security company GigaTrust was sentenced to five years in prison for fabrications that allowed him and two other executives to defraud investors and lenders of millions.

From 2016 until GigaTrust filed for bankruptcy in November 2019, CEO Robert Bernardi schemed with former Chief Financial Officer Nihat Cardak and former Vice President for Business Development Sunil Chandra to mislead investors and banks into believing the company was financially healthy, the DOJ stated in a press release Tuesday.

The three overstated bank deposits, drafted fake audit reports, and impersonated an outside auditor to try and fool banks into lending them $50 million, according to their indictment, which was filed in U.S. District Court for the Southern District of New York in October 2021.

Bernardi pleaded guilty in August to conspiracy to commit securities fraud, bank fraud, and wire fraud. Cardak pleaded guilty earlier this month and is scheduled to be sentenced in May. Chandra still awaits trial.

“Robert Bernardi repeatedly lied and impersonated others in order to convince investors and lenders to fund his failing company,” U.S. Attorney Damian Williams said in the DOJ’s release. “Rather than admit that GigaTrust was underperforming, Bernardi concocted multiple schemes to keep the company afloat, defrauding investors and lenders out of millions.”

Adrianne Appel writes regulatory news, policy, and trends for Compliance Week. She previously reported about policy developments for Bloomberg Law and Bloomberg Government.

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