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FTE Networks former execs accused of fraud, embezzlement



(Reuters) – Federal and New York prosecutors on Thursday charged two former FTE Networks Inc. executives with several offenses, including fraudulent network infrastructure company auditors and investors, inflated revenue, embezzlement of money for luxury and theft. [19659002] Former CEO Michael Palleschi and former CFO David Lethem were each charged with securities and wire fraud, which falsely influenced audits, identity theft and conspiracy, said U.S. Attorney Audrey Strauss in Manhattan.

The U.S. Securities and Exchange Commission filed related civil lawsuits against Mr. Palleschi, 46, of Naples, Florida and Wellesley Island, New York, and Mr. Lethem, 62, of Fort Myers, Florida.

Manhattan District Attorney Cyrus Vance accused both defendants separately of large-scale alarms, saying they stole more than $ 28 million from construction manager Benchmark Builders Inc. to make FTE's finances look better and fund Mr. Palleschis

Lawyers for the defendants could not be located immediately. FTE did not immediately respond to a request for comment. The New York ̵

1; based firm's shares were traded on the US NYSE market before being shut down in December 2019.

Federal prosecutors said that from 2016 to February 2019, defendants used forgeries and false board decisions to mislead external auditors by more than 22 million dollars. of convertible banknotes that FTE sold and kept liabilities for the banknotes off FTE's balance sheet.

Authorities said Palleschi and Lethem also asked FTE to report more than $ 12 million in unearned revenue and diverted corporate funds. for salary increases, private jet use, luxury cars and other personal expenses. Catalog

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