The former CEO of a Las Vegas-based anti-cyberfraud company has been charged with defrauding investors of $17 million.
According to a complaint filed in federal court today, Adam Rogas, co-founder and former CEO, CFO, and board member of NS8, which bills itself as a “fraud prevention and detection platform,” personally defrauded investors after raising $123 million in a round of financing for the company, using faked financial statements.
“As alleged, Adam Rogas was the proverbial fox guarding the henhouse,” said U.S. Attorney Audrey Strauss in a press release. “While raising over $100 million from investors for his fraud prevention company, Rogas himself allegedly was engaging in a brazen fraud.”
An FBI investigation that had the help of the Securities and Exchange Commission (SEC) alleges that Rogas, whose major responsibility for NS8 was fundraising for the company, began a fraudulent campaign in the fall of 2019. Using his personal control over NS8 spreadsheets and financial statements, he allegedly cooked the numbers, creating enticing and “fictitious” revenue totals for potential investors. Once those investments were secured to the company, as a senior member of the NS8 he received a cut of those sums, which amounted to nearly $17.5 million, according to the indictment.
“It seems ironic that the co-founder of a company designed to prevent online fraud would engage in fraudulent activity himself, but today that’s exactly what we allege Adam Rogas did,” said FBI Assistant Director William F. Sweeney Jr. in the DOJ release. “Rogas allegedly raised millions of dollars from investors based on fictitious financial affirmations, and in the end, walked away with nearly $17.5 million worth of that money.”
Rogas, who was arrested today in Nevada but will be tried in the Southern District of New York, is now facing up to 45 years in prison on several charges: one count of securities fraud, and one count of fraud in the offer or sale of securities, and one count of wire fraud.
According to the complaint, Rogas’ alleged crimes were detected by his coworkers in the finance department of NS8 in August 2020 after they checked company accounts amounting to “tens of thousands of dollars,” and not the millions Rogas had reported. When he was confronted by the employees he reassured them, texting: “[o]n the phone with the bank we are ok, appears to be an issue with the way that the sweep works and phone banking.”
Shortly after this exchange, according to the complaint, Rogas agreed to meet the finance employees in the Las Vegas area, but didn’t show up. He then resigned from NS8 in early September.