313 people arrested for e-commerce scams and money laundering totalling over $1.2 million

SINGAPORE – In the first half of August alone, 313 suspects have been arrested for alleged scams, money laundering and unlicensed moneylending

The police has warned that online scams represent a growing threat.

The suspects, aged between 16 and 76, were arrested in a nine-day enforcement operation from Aug 3 to Aug 14.

Officers from the Bedok Police Division are investigating a total of 220 men and 93 women for the alleged offences.

Some 49 men and 29 women, aged between 19 and 72, are being investigated for their suspected involvement in e-commerce scams and money laundering activities involving transactions totalling over $1.24 million.

During the operation, five men and four women, aged between 16 and 56, were arrested for their suspected involvement in cases of cheating and criminal breach of trust.

A total of 166 men and 60 women, aged between 16 and 76, are being investigated for their suspected involvement in loan scams and loan shark activities involving transactions exceeding $296,000.

Among these, 34 men and eight women were arrested for offences under the Moneylenders Act.

Commander of Bedok Police Division and Assistant Commissioner of Police Julius Lim said the operation reflected the division’s commitment to keeping residents safe online at a time when more people were using the internet.

“The scale of the operation reminds us of the growing threat of online scams. It behooves us to exercise caution when using the Internet.”

“To avoid becoming an accomplice to scams, the public is advised to reject requests by others to use your bank account or mobile lines as they may be later used for illegal transactions. We hope the public will join us in staying vigilant,” he said.

The number of e-commerce scams committed from January to March 2020 was up by 116.2 per cent from the same period last year, reaching 1,159 from 536.

During this period, people got cheated out of at least S$1.3 million, compared with $469,000 in the same period last year. The largest sum cheated in a single case was $175,000.

Under the Moneylenders Act, first time offenders convicted of assisting in carrying on the business of unlicensed money lending may be fined up to between $30,000 and $300,000, jailed up to four years and receive up to six strokes of the cane.

Second time offenders may be fined between $30,000 and $300,000, jailed up to seven years and  receive up to 12 strokes of the cane.

Those convicted of cheating may be jailed up to 10 years and fined.

Those convicted of money laundering may be jailed up to 10 years and fined up to $500,000.

Those convicted of criminal breach of trust may be jailed up to seven years, fined, or both.

Ex-Aide For Film, TV Producer Jerry Bruckheimer Family Alleges Harassment As She’s A Polish Woman

A 51-year-old former personal assistant to film and television producer Jerry Bruckheimer, his wife and his stepdaughter is suing all three, alleging she was subjected to discrimination and harassment because she is a woman and of Polish descent.

Marta Strodes’ Los Angeles Superior Court lawsuit alleges she was forced to quit in 2018 because of her work conditions. She seeks unspecified damages in the complaint filed Monday.

A representative for the 76-year-old Bruckheimer, his wife, 74-year-old novelist Linda Sue Bruckheimer, and his stepdaughter, Alexandra Balahoutis, could not be immediately reached.

Strodes worked in the Bruckheimer home in Beverly Hills from February 2017 until she quit in November 2018, the suit states. She primarily assisted Balahoutis, according tot he suit.

Balahoutis subjected Strodes to ongoing discrimination and harassment on the basis of her Polish origin and because she was a woman, the suit states. Balahoutis mocked the plaintiff’s accent and insinuated that she was unintelligent, the suit states.

Balahoutis assigned Strodes “extreme and unreasonable demands which were designed to set Strodes up for failure and to humiliate and belittle her in the process,” the suit states. Balahoutis once sent Strodes “on a wild goose chase for hours to only later taunt her for failing to meet Balahoutis’ unreasonable and irrational demands,” it continues.

Balahoutis demanded that Strodes work long hours beyond her normal shift, causing the plaintiff to often miss her meal and rest breaks, the suit states.

Male household staff members “were not treated in the same discriminatory and humiliating manner as Strodes and the other female household staff,” the suit states.

Strodes also was forced to make purchases for Balahoutis on the plaintiff’s personal credit cards because the credit card the plaintiff was provided to cover Balahoutis’ expenses was continually rejected, the suit states.

AnnuitySold Fraudster Richart Ruddie’s Textbook Frauds Cited 14 Times in Forthcoming 2020 Utah Law Review

UCLA law professor Eugene Volokh has compiled information on phony anti-libel takedown injuctions in an aptly named Shenanigans (Internet Takedown Edition), which will published in the forthcoming Utah Law Review, 2020.

Professor Volokh’s informative 55 page treatise can be found online and features, among other things, the shenanigans of “reputation manager” and AnnuitySold fraud Richart Ruddie, who was mentioned 14 times, in conjunction with a multi state de-indexing scam tied to Ruddie’s “reputation management” company, that was uncovered in 2016. The Richart Ruddie scam included a Rhode Island case, which used a check from RIR1984 LLC, a company started by him, Owings Mills high school chum Ryan Blank and a California lawyer, to fund the cost of a process server and the documents were sent to the process server in California using an AnnuitySold email. In January 2018, AnnuitySold and related structured settlement factoring companies associated with Richart Ruddie and Ryan Blank were later banned from doing business in Maryland for 7 years for other frauds soliciting people with structured settlements.

Excerpt: “The Rhode Island litigation also uncovered who was responsible: Richart Ruddie, owner of the reputation management companies SEO Profile Defender Network LLC— which had promised “guaranteed removal”(no payment if the removal does not happen) to its customers—and RIR1984 LLC. Ruddie ultimately settled the case in exchange for $71,000, chiefly consisting of Myvesta’s legal fees (a good measure of how much it would have cost Google to challenge the injunction, had it had a legal obligation to comply with it). Ruddie also agreed to ask Florida and Maryland courts to vacate three other court orders that called for the de indexing of Myvesta posts related to Smith’s companies, Smith v. Levin, Financial Rescue LLC v. Smith, and Rescue One Financial LLC v. Doe. In Smith v. Levin, court records included Levin’s ostensible address (the common practice in Maryland); no-one with that name could be found at that address. Professor Volokh confirmed through independent sources that some of the other cases that fit the same modus operandi were likewise filed through Richart Ruddie. The pattern in all these cases appears to have been the same:

1.The company filed a libel lawsuit in the plaintiff’s name against a fake defendant, seeking an injunction

2.The complaint was accompanied with a stipulation supposedly signed by the defendant (but in reality, produced by the company itself).

3.The hope—often realized—was that the trial judge would see that the parties agree on the injunction, and therefore sign the injunction without much fur-ther scrutiny. Indeed, in two cases, a permanent injunction was entered a mere four days after a complaint was filed together with a stipulation.

4.The reputation management company would then send this order to Google or Yelp, asking the platform to deindex or remove the material that the order has ostensibly found to be defamatory”

Volokh’s treatise provides helpful information concerning:

  • Forgeries
  • Stipulated Injunctions Involving Apparently Fake Defendants
  • Stipulated Injunctions Involving Fake Notarizations
  • Default Judgments Gotten Without Gneuine Attempts to Locate Defendants
  • Wag the Dog Injunctions, Sue the Commenter, not the Author
  • Buried URL injunction

Shopin founder charged by SEC for running $42 million scam cryptocurrency ICO

SEC alleges that investor funds were spent on dating services and shopping sprees.

The US Securities and Exchange Commission (SEC) has filed charges against the founder of Shopin for allegedly running a scam ICO to defraud investors out of $42 million.

The SEC’s complaint, filed in federal district court in Manhattan, claims that from August 2017 to April 2018, Eran Eyal, the founder of UnitedData — trading as Shopin — operated an unregistered ICO without any project or product to back its claims. 

Initial Coin Offerings (ICOs), also known as token sale events, are launched as an alternative means to raise funding, rather than having to rely on banks or angel investment. 

Before an ICO begins, companies usually produce a business plan, white paper documenting its blockchain technology, and USP expectations of a service.

In exchange for user funding, participants are given tokens, and herein lies the risk. If a project is not legitimate or an exit scam is performed, investors are left holding virtual coins that are worthless. 

The Wild West of ICO scams became so prevalent that SEC pushed for digital assets to become securities, holding ICO events and token creators accountable to federal standards. However, the spirit of the ICO scam lives on.

On Wednesday, the commission said that Eyal’s Shopin token offering was not registered with SEC. Shopin claimed the funds would be used to develop a platform able to support universal shopper profiles on a blockchain that would track purchase histories and be able to make recommendations based on this data — but no such platform ever existed. 

SEC further claims (.PDF) that Eyal and the company “repeatedly lied to investors in connection with its offering, including misrepresentations about purported partnerships with certain well-known retailers and about the involvement of a prominent entrepreneur in the digital asset space.”

After raising $42 million fraudulently, Eyal allegedly spent the money on personal expenses — at least $500,000 of which went on dating, rent, shopping, and entertainment. 

Eyal and Shopin are being charged with violating federal securities laws. The commission is seeking injunctions, civil penalties, restitution, and permanent bars against Eyal for officer and directorship. 

“The SEC seeks to hold Eyal and Shopin responsible for scamming innocent investors with false claims about relationships and contracts they had secured in support of a blockchain-based universal shopper profile,” said Marc Berger, Director of the SEC’s New York Regional Office. “Retail investors considering an investment in a digital asset that meets the definition of a security must be afforded the same truthful disclosures as in any traditional securities offering.”

The SEC has asked anyone who believes they have been defrauded through the Shopin ICO to contact the agency. 

Earlier this week, the US Department of Justice (DoJ) arrested three out of five suspects believed to have operated a Ponzi scheme responsible for defrauding investors out of $722 million. The operators of BitClub Network, one of which allegedly called participants “sheep,” pretended to use investor cash to invest in Bitcoin mining equipment while actually planning to retire “rich as f*ck.” 

Ex-Raymond James Rep Suspended After Violating Trading Rules

The broker made securities transactions in his own account after becoming privy to confidential info, FINRA says.

The Financial Industry Regulatory Authority suspended a former Raymond James broker for three months after he violated the rules of his former firm and FINRA by making two security transactions in his personal account while possessing nonpublic, confidential information about a Raymond James customer’s position in that security, according to FINRA.

Alastair Jamie Barnes signed a letter of acceptance, waiver and consent on Tuesday in which, without admitting or denying FINRA’s findings, he agreed to the suspension, to pay a $20,000 fine and to disgorge profits he made from the transactions in the amount of $585. FINRA accepted the letter Thursday.

Raymond James declined to comment Friday. Barnes and his attorney, Jason Gottlieb of Morrison Cohen in New York, didn’t immediately respond to a request for comment.

Barnes had worked in the Raymond James Institutional Equity Sales Department, according to the FINRA letter. On two separate occasions, he “effected two securities transactions in his personal brokerage account after learning non-public, confidential information about a Firm customer’s position in the subject security, even though Firm policy prohibited employees from using such information for non-Firm purposes,” the letter said.

He also had not requested, nor received, pre-approval for either personal transaction, as required by Raymond James policy, according to the letter. Through his conduct, he violated FINRA Rule 2010, which requires an associated person to “observe high standards of commercial honor and just and equitable principles of trade” in the conduct of his business,” FINRA said.

Barnes first registered with a FINRA member firm as a general securities representative in November 2014, when he became associated with Raymond James, according to the FINRA letter. He remained with the firm until 2018, when he “resigned voluntarily,” effective Aug. 21, 2018, “while under internal review for potential violations” of the firm’s trading policies, the letter says. Raymond James filed a Form U5 termination notice Sept. 19 that year, according to FINRA.

Barnes then went to work as an analyst for real estate services firm HFF in August 2018, according to his LinkedIn profile. That firm was bought by JLL, where he remained and last had the title of debt and structured finance analyst, according to the LinkedIn profile. JLL didn’t immediately respond to a request for comment.

There were no disclosures on his profile at FINRA’s BrokerCheck website on Friday.

Atonomi ICO Slapped with $25 Million Lawsuit

The IoT security firm Atonomi faces a $25 million class-action lawsuit for failing to register their ICO with the SEC according to recent court documents filed in Washington State. Investors in the Atonomi platform claim that the firm misrepresented its progress and development team’s experience. Now, a Washington Court will determine the fate of these millions.

In 2018, Atonomi made headlines after securing $25 million in funding via an ICO. Since that time, the project has seen little development. Consequently, the value of the Atonomi token dropped by ninety-nine percent. As a result, investors are understandably upset and many feel as is they were scammed.

Full Refund

Luckily, there is some recourse due to the manner in which Atonomi hosted their ICO. Investors now claim the firm failed to register with either Washington State or the Feds. In the lawsuit, they seek a full refund of the $25 million raised from the ICO.

Discussing the matter via social media, an attorney familiar with the case, Stephen Palley, explained that Atonomi issued SAFT contracts to investors. A SAFT Contract (Simple Agreement for Future Tokens) is an investment contract used by ICOs to meet federal and local regulations. When used, firms must register their crowdfunding event with the SEC. Not surprisingly, Atonomi failed to do so.

Hold Management Team Liable

The lawsuit seeks to hold the management team behind the Atonomi ICO financially and legally liable for losses. Robert Strickland is listed as the CEO of the firm. There are no public comments from the Atonomi team regarding the lawsuit.

Atonomi

Atonomi is a blockchain-base IoT (Internet of Things) security protocol. The platform enables IoT developers to embed identification and reputation solutions directly into their networks. Unfortunately, Atonomi failed to create a real use case for their token. This makes it’s token’s only use as an investment vehicle, which furthers the argument that the Atonomi Token is a tokenized security.

Security Token vs Utility

The SEC started cracking down on what they deem “illegal security offerings” in early 2018. Since then, a number of high profile cases emerged. These cases have gone in different directions. In the case of Ripple, the court found that the crypto had a true utility and therefore, was not a security token.

The SEC Chairman, Jay Clayton, deemed that Ethereum acted as a security during the crowdfunding phases of the operation but today is a utility token. They decided against pursuing the crypto for its initial crowdfunding breaches. While both of these cases sided with the ICO, there are many others that went in the opposite direction.

SEC on the Hunt

The Paragon Coin project is currently facing legal ramifications for offering securities illegally. In this instance, the celebrity promoters, the rapper The Game, and former Miss Iowa, Jessica VerSteeg, also face charges for their participation. The case signals increased prosecution for those assisting in the sales of illegal securities.

More to Come

You can expect to see more lawsuits regarding shady 2017 -2018 ICOs emerge. These investors are on the warpath after billions of dollars disappeared behind the smoke of the ICO rush. Atonomi seems to face an uphill battle. Their failure to register with the local authorities, combined with the lack of transparency regarding development, could result in a huge downfall for the firm.

Indian billionaire arrested in London over alleged $2B fraud

London (CNN)UK police have arrested India’s billionaire diamond dealer Nirav Modi in London over his alleged involvement in a bank fraud that could be worth $2 billion.

Modi was arrested Tuesday on “behalf of the Indian authorities,” according to a statement from London’s Metropolitan Police. His plea for bail was later denied and he was remanded in custody until March 29, according to Westminster Magistrates’ Court.

Punjab National Bank, one of India’s largest, reported fraudulent activity at one of its branches more than a year ago.

India then issued an Interpol Red Notice for Modi’s arrest and London authorities were asked to proceed with it, said a spokesperson for India’s Enforcement Directorate. The Indian foreign ministry said in a statement it welcomed the arrest, and would seek to extradite Modi as soon as possible.

Modi and officials at the bank allegedly issued fraudulent Letters of Undertakings to overseas banks to obtain buyer’s credit, according to India’s Central Bureau of Investigation (CBI).

“Investigation further revealed that the fraud was allegedly perpetrated despite the knowledge of senior officials of Punjab National Bank, who did not implement the circulars and caution notices issued by the Reserve Bank of India regarding safeguarding the SWIFT operations and instead, misrepresented the factual situation to RBI,” according to a statement from the CBI last year.

The CBI has raided dozens of offices and seized property worth millions of dollars belonging to Modi, who denies all wrongdoing. He has already been charged by the bureau for criminal conspiracy, fraud and corruption.

Forbes once ranked Modi as India’s 85th richest man, with a net worth of $1.8 billion.

His arrest may have an impact on upcoming Indian elections due to take place in May.

The discovery of the alleged fraud and Modi’s refusal to return to India to face criminal charges has increased pressure on Prime Minister Narendra Modi — no relation to Nirav Modi — who promised to fight corruption in India.

Tuesday’s arrest and the possibility of extradition could help to improve the Prime Minister’s tarnished image.

Rahul Gandhi, leader of the principle opposition party Congress, has repeatedly attacked PM Modi on his failure to bring fugitives back to India.

In 2016, liquor baron Vijay Mallya left the country owning an estimated $1.6 billion to 17 Indian banks.

The process for Mallya’s extradition to India is ongoing. He has denied fleeing the country over his debts and described charges of fraud and money laundering as “false, fabricated and baseless.”

PwC investigation finds $7.4 billion accounting fraud at Steinhoff, company says

JOHANNESBURG (Reuters) – South African retailer Steinhoff said an independent report had found it had overstated profits over several years in a $7.4 billion accounting fraud involving a small group of top executives and outsiders.

Steinhoff first disclosed the hole in its accounts in December 2017, shocking investors who had backed its reinvention from a small South African outfit to a multinational retailer at the vanguard of the European discount furniture retail industry.

In the country’s biggest corporate scandal, an investigation carried out by PwC found the firm recorded fictitious or irregular transactions totaling 6.5 billion euros ($7.4 billion) over a period covering the 2009 and 2017 financial years, according to a summary of the findings posted on the Steinhoff company website.

Investigators found that a small group of former Steinhoff executives and individuals from outside the company, led by an identified “senior management executive,” implemented the deals, which substantially inflated the group’s profit and asset values, the summary said.

Steinhoff did not name the individuals but said those implicated were no longer employed by the company. A company spokeswoman declined to give further details.

The scandal has all but wiped out shareholders’ equity and led to several resignations including chief executive Markus Jooste, who was instrumental in putting Steinhoff on investor radar screens.

Jooste, who has denied any wrongdoing, has not yet made himself available for questioning by PwC investigators. His lawyers did not immediately respond to Reuters email and telephone requests for comment.

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The scandal has wiped out 216 billion rand from Steinhoff’s market value since December 2017, a dramatic turnaround of fortunes for a company that was once a must-have in fund mangers’ portfolios.

Steinhoff said investigators found that top management figures entered into fictitious transactions with entities purported to be independent third parties to create the illusion of income used to hide losses at the company’s operating units.

The company did not name the units but said they did not include two European subsidiaries, Pepkor Europe and Poundland, or any of its African units, which include Pepkor Holdings.

“The transactions identified as being irregular are complex, involved many entities over a number of years and were supported by documents including legal documents and other professional opinions that, in many instances, were created after the fact and backdated,” Steinhoff said.

FINANCIAL IMPACT

The full financial impact of the findings was still being determined and would be reflected “to the extent possible” in a restatement of company earnings in the 2016 financial year and as yet unpublished earnings in 2017 and 2018, it said.

The company already wrote down the value of its assets by more than $12 billion after PwC provided a copy of its initial findings in June.

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“If we become aware that this impact is materially different, we will update the market,” said Reina de Waal, head of investor relations at Steinhoff.

Steinhoff said it would cooperate fully with any criminal investigations and pursue claims against those responsible for the “unlawful conduct” outlined in the 3,000-page report.

Police in South Africa have said they were waiting for the PwC report before deciding on bringing charges in connection with the fraud.

The disclosure of the scandal in 2017 sparked multiple investigations, including by the elite police unit known as the Hawks.

The state prosecutor in Oldenburg, Germany, has also been investigating the company for suspected accounting irregularities since 2015.

Numerous lawsuits have been filed against Steinhoff, including 59-billion-rand claim by former chairman and top shareholder Christo Wiese and a class action suit from Dutch shareholder rights group VEB.

AriseBank execs forced to pay $2.7 million to settle SEC charges of cryptocurrency fraud

The organization claimed to operate a unique, decentralized bank via the blockchain.

AriseBank’s CEO and a co-conspirator have been ordered to pay $2.7 million to the US Securities and Exchange Commission (SEC) to settle charges relating to a cryptocurrency banking scam and ICO.

On Wednesday, the US regulator announced the ruling in the case, which revolved around AriseBank, a now-defunct blockchain startup.

The organization claimed to be “the first decentralized bank to offer the first and largest cryptocurrency banking platform in the world,” and said that users could “serve as their own bank.”

A service which integrated both traditional fiat currencies and over 700 modern cryptocurrencies appeared as a tempting investment to many, bolstered by AriseBank’s claims of partnerships with reputable financial companies such as Visa and the intended acquisition of KFMC Bank Holding Company and TPMG — both of which were described as traditional banks, but neither appear to exist.

To generate further excitement, celebrities also endorsed the company, a common tactic used by both legitimate and fraudulent blockchain companies to promote their projects.

However, not all was as it seemed. No partnerships with financial services companies were established, and no acquisitions were on the table.

In addition, AriseBank falsely claimed to be insured under the US Federal Deposit Insurance Act (FDIC), a regulatory element which would quiet even the most skeptical of would-be investors

Indeed, the reality was that investors had been duped by the service, which if legitimate, could have been proven to be a radical force in future banking.

Instead, millions of dollars in investor funds, raised by issuing the AriseCoin cryptocurrency, were allegedly being spent to fund luxury lifestyles.

AriseBank CEO Jared Rice Sr. and COO Stanley Ford, were accused by SEC of operating a fraudulent Initial Coin Offering (ICO) scheme earlier this year. ICOs, when legitimate, can prove the financial boost necessary to lift blockchain-related projects off the ground — but lackadaisical regulation has led to a Wild West scenario teeming with scams and fake companies.

Indeed, the reality was that investors had been duped by the service, which if legitimate, could have been proven to be a radical force in future banking.

Instead, millions of dollars in investor funds, raised by issuing the AriseCoin cryptocurrency, were allegedly being spent to fund luxury lifestyles.

AriseBank CEO Jared Rice Sr. and COO Stanley Ford, were accused by SEC of operating a fraudulent Initial Coin Offering (ICO) scheme earlier this year. ICOs, when legitimate, can prove the financial boost necessary to lift blockchain-related projects off the ground — but lackadaisical regulation has led to a Wild West scenario teeming with scams and fake companies.

While neither admitted nor denied the charges, Rice and Ford will be forced to jointly pay $2,259,543 in disgorgement — a legal demand which forces individuals or companies to give up cash or assets gained illegally — as well as $68,423 in prejudgment interest and $184,767 in penalties.

In addition, both individuals have agreed not to serve as officers or directors of public companies, and are no longer permitted to be involved in digital securities offerings.

“Rice and Ford lied to AriseBank’s investors by pitching the company as a first-of-its-kind decentralized bank offering its own cryptocurrency for customer products and services,” said Shamoil Shipchandler, Director of the SEC’s Fort Worth Regional Office. “The officer-and-director bar and digital securities offering bar will prevent Rice and Ford from engaging in another cryptoasset-based fraud.”

Criminal charges are still outstanding in Rice’s case. Announced last month by the US Department of Justice (DoJ), the former executive is facing allegations of both securities fraud and wire fraud. If found guilty, Rice may face up to 120 years in jail.

Former Autonomy Executives Indicted On Criminal Conspiracy And Fraud Charges

Former Autonomy CEO Mike Lynch and Finance VP Stephen Chamberlain allegedly engaged in fraudulent accounting practices to boost the company’s value prior to its acquisition by HP in 2011.

Former Autonomy Corp. CEO Mike Lynch has been indicted on criminal fraud charges surrounding the $11 billion sale of Autonomy to Hewlett Packard in 2011.

The charges, including 14 counts of conspiracy and fraud, were filed in U.S. District Court in San Francisco late last week and carry a penalty of up to 20 years.

The charges stem from Autonomy’s allegedly fraudulent accounting practices that were intended to inflate Autonomy’s value and boost the price HP paid for the company. The indictments say that Lynch fraudulently made $815 million from the alleged crimes.

Lynch has vowed to fight the charges, according to statements from his attorneys, calling them “a travesty of justice.”

The new indictments also charge Stephen Chamberlain, who was Autonomy’s vice president of finance from 2005 to 2011, with fraud.

The indictments are the latest twist in the long-running saga of Autonomy, once seen as one of the U.K.’s most successful IT companies, and its acquisition by Hewlett-Packard Co. in 2011. HP bought Autonomy as part of its efforts to expand its software technology portfolio.

Within a year HP, which has since split into HP Inc. and Hewlett Packard Enterprise (HPE), took a massive $8.8 billion write down of the Autonomy assets, claiming that the company’s value had been inflated through fraudulent accounting practices.

Many of the Autonomy assets were sold off to Micro Focus in 2016 as part of a broader deal.

Lynch, who co-founded Autonomy in 1996, has publicly countered the charges by saying HP botched the acquisition and subsequent integration, leading to its reduced value.

Lynch’s lawyers, Chris Morvillo of Clifford Chance and Reid Weingarten of Steptoe & Johnson, said the indictment was a “travesty of justice” and that Lynch would contest the charges, according to a Reuters report.

“HP has sought to blame Autonomy for its own crippling errors and has falsely accused Mike Lynch to cover its own tracks,” the lawyers said in a statement. “Mike Lynch will not be a scapegoat for their failures. He has done nothing wrong and will vigorously defend the charges against him,” the statement said, adding that the claims come down to a dispute over the application of U.K. accounting standards, according to the Reuters story.

Lynch’s lawyers did not respond to emails from CRN for additional comment.

Lynch and Chamberlain aren’t the first to face charges in the case. In April of this year Sushovan Hussain, Autonomy’s former chief financial officer, was found guilty by a U.S. federal court jury on 16 counts of wire and securities fraud related to Autonomy’s finances prior to the HP acquisition. He has vowed to appeal that conviction.

The charges against Lynch and Chamberlain could provide some vindication for HPE’s claims about Autonomy and its financial state prior to the 2011 acquisition.

“HPE is gratified that justice prevailed and that Mr. Hussain was held accountable for his criminal actions when he was convicted in April of this year,” HPE said in a statement issued following the indictments.

“HPE is now pleased to learn that Dr. Lynch and Mr. Chamberlain have also been criminally charged in this matter by a federal Grand Jury. HPE believes that the facts uncovered during the course of this matter will further demonstrate the harm that was caused by Dr. Lynch, Mr. Chamberlain, Mr. Hussain and others to HP and looks forward to seeing justice served once again,” HPE said.

HPE is also pursuing a $5.1 billion civil case against Lynch and Hussain in London, seeking damages, while Lynch has counter-sued claiming HP’s statements have damaged his career and reputation.

Following the indictment, Lynch stepped down as a U.K. government scientific advisor with the Council for Science and Technology, according to a BBC story.