ServiceMesh Co-Founder Accused of Fraud
The US Securities and Exchange Commission has filed charges against Eric Pulier, the co-founder of ServiceMesh (SMI) and a former IT executive at Computer Sciences Corporation (CSC). According to the regulator, Pulier bilked CSC of $98M related to its acquisition of SMI.
The SEC contends that Pulier bribed an ex-Commonwealth Bank of Australia VP and another ex-bank executive so that Commonwealth would go into contracts with CSC that would allow SMI to get a $98M earn-out payment from the former as part of the acquisition. This meant that the contracts had to satisfy a $20M revenue threshold prior to a specific date.
Meantime, claims the SEC, Pulier was the recipient of more than $30M of that $98M because he was a majority SMI shareholder. He allegedly used a nonprofit to funnel more than $2.5M to the two ex-Commonwealth Bank of Australia as kickbacks.
Prosecutors have brought parallel criminal securities fraud charges against Pulier.
SEC Freezes Assets of Couple Accused in $12M EB-5 Investment Fraud
The SEC now has an emergency court order to freeze the assets of Edwards Chen and his wife Jean Chen, who are both accused of bilking investors through two EB-5 investment offerings. The regulator’s complaint accuses the couple of raising over $22.5M from 45 investors in China. The funds were supposedly to go toward an interior design center and a residential building in Los Angeles County. The investors gave them the funds to take part in the EB-5 program, which lets foreign investors earn legal residence if they invest a certain amount of funds in US-based projects that lead to at least 10 new jobs for workers.
However, now the SEC is contending that the Chens stole over $12M of investor funds by writing cashier’s checks to Jean, moving money to affiliated entities, and buying residential real estate that had nothing to do with the EB-5 projects. They are accused of misappropriating over 91% of the fund.
Wisconsin Businessman Accused of Stealing More than $3.9M from Investors
Ronald Van Den Heuvel, a Wisconsin businessman, is now facing criminal and civil charges accusing him of stealing over $3.9M from investors, whom he solicited by promising to use their money to establish a “green” method for post-consumer waste, set up a related facility, and purchase equipment for what he called the “Green Box Process.” The SEC said that Van Den Heuvel allegedly raised over $7.6M from at least 10 investors, claiming that tax-exempt bonds would be the source of $95M to $125M in financing even though he knew his bond application had been denied.
However, rather than using investor money as he promised, Van Den Heuvel allegedly spent their funds to purchase Green Bay Packer tickets and a Cadillac, pay overdue taxes in Wisconsin and to the IRS, and for payments to his mother-in-Law and ex-wife. Now, the regulator wants disgorgement, permanent injunctions, prejudgment interest, and penalties.
The SEC Complaint in the Pulier case, SEC (PDF)
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