Founder Of Cyberfraud Prevention Company Pleads Guilty To Defrauding Investors Of Over $100 Million

 

Adam Rogas Raised $123 Million From Investors Using Financial Statements That Showed Tens of Millions of Dollars of Revenue and Assets that Did Not Exist

 Damian Williams, the United States Attorney for the Southern District of New York, announced that ADAM ROGAS, the co-founder and former CEO, CFO, and member of the board of directors of Las Vegas-based cyberfraud prevention company NS8, Inc. (“NS8”), pled guilty today in Manhattan federal court to securities fraud.  ROGAS used fraudulent financial data to obtain over $123 million in financing for NS8, of which he personally obtained approximately $17.5 million. ROGAS pled guilty today before U.S. District Judge John P. Cronan, and is scheduled to be sentenced by Judge Cronan on August 10, 2022. 

U.S. Attorney Damian Williams said:  “Today, Adam Rogas admitted to being the proverbial fox guarding the henhouse.  While claiming to be in the fraud prevention business, Rogas himself defrauded investors in his company of over $100 million.  Now Rogas will be held accountable for his fraudulent scheme.”

According to the Complaint, Indictment, and other publicly-filed documents: 

ADAM ROGAS was a co-founder of NS8, and served as its CEO, CFO, and a member of its board of directors.  ROGAS was also primarily responsible for the company’s fundraising activities.  NS8, which was based in Las Vegas, Nevada, was a cyberfraud prevention company that developed and sold electronic tools to help online vendors assess the fraud risks of customer transactions.  In the fall of 2019 and the spring of 2020, NS8 engaged in fundraising rounds through which it issued Series A Preferred Shares and obtained approximately $123 million in investor funds.

ROGAS maintained control over a bank account into which NS8 received revenue from its customers, and periodically provided monthly statements from that account to NS8’s finance department so that NS8’s financial statements could be created.  ROGAS also maintained control over spreadsheets that purportedly tracked customer revenue, which were also used to generate NS8’s financial statements.

ROGAS altered the bank statements before providing them to NS8’s finance department to show tens of millions of dollars in both customer revenue and bank balances that did not exist.  In the period from January 2019 through February 2020, between at least approximately 40% and 95% of the purported total assets on NS8’s balance sheet were fictitious.  In that same period, the bank statements that ROGAS altered reflected over $40 million in fictitious revenue.

Altered (L) and original (R) bank statements for NS8’s revenue account.  Rogas altered statements for the account to show tens of millions of dollars in revenue (deposits) that did not exist.

ROGAS used these materially misleading financial statements to raise approximately $123 million from investors in the fall of 2019 and the spring of 2020.  During the fundraising process, ROGAS also provided the falsified bank records he had created to auditors who were conducting due diligence on behalf of potential investors.  After these fundraising rounds concluded, NS8 conducted a tender offer with the funds raised from investors, and ROGAS received $17.5 million in proceeds from that tender offer, personally and through a company he controlled.

ROGAS, 44, of Las Vegas, Nevada, pled guilty to one count of securities fraud, which carries a maximum sentence of 20 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Williams praised the outstanding investigative work of the FBI in this investigation.  Mr. Williams further thanked the Securities and Exchange Commission for its cooperation and assistance in this investigation.  

Attorney General James Applauds New Laws to Combat Sexual Harassment

 

 New York Attorney General Letitia James released the following statement applauding new laws signed today to combat sexual harassment in New York:

 “Sexual harassment is pervasive, corrosive, and has been a silent barrier for women in the workplace for far too long. Today is an important day in our collective efforts to combat sexual harassment, and I am grateful to Governor Hochul and the legislative sponsors for their work on these issues. Most importantly, I am grateful to the advocates who shined a light in the dark corners of our society and fought tirelessly to make these critical protections a reality. Every workplace should be safe from harassment or abuse, and these new laws will go a long way towards ensuring we have the proper tools to protect people from harassment and retaliation.”

MAYOR ADAMS RAISES IRISH FLAG HONORING THE FIRST IRISH IMMIGRANTS WHO ARRIVED IN NEW YORK CITY

 

 New York City Mayor Eric Adams today raised the Irish flag with St. Patrick’s Day Parade officials at Bowling Green Park in honor of the first Irish immigrants who arrived in New York City. Elected officials and community members joined the flag-raising ceremony to kick off St. Patrick’s Day celebrations, and Mayor Adams reflected on New York City’s rich Irish history and contributions at the ceremony.

“New York City is a city of immigrants, rich in its culture and diversity, and our Irish brothers and sisters have contributed to our city’s history for generations,” said Mayor Adams. “This St. Patrick’s Day, we honor those Irish immigrants who relocated and helped build our city and the many Irish Americans who serve New York City to this day. Today, we celebrate the fighting spirit of the Irish with the courage and resilience of this entire city.”

 

“Bowling Green’s rich history dates back to the very founding of New York City in the 1600s. Like so many others, immigrants came to what is now Bowling Green Park in search of a better life,” said Arthur Piccolo, president, Bowling Green Association. “Mayor Eric Adams raising the Irish flag today on the eve of St. Patrick’s Day is a reminder of the vast contributions Irish immigrants have made to our great city.”

 

“Thursday will mark a new beginning for New York City and the country as we host the first major celebration since the pandemic started in 2020 — the 261st New York City St. Patrick’s Day parade on Fifth Avenue,” said Hilary Beirne, chairman and parade chief administrative officer, St. Patrick’s Day Parade Foundation. “We dedicate the parade to labor and the victims of the pandemic. The parade, like spring, which is just around the corner, will mark the renewal of life in the city post-pandemic. We look forward to greeting everyone on Fifth Avenue in the greatest parade in the world, which is in the greatest city in the world, as a sign of a new beginning,”

Governor Hochul Updates New Yorkers on State's Progress Combating COVID-19 - MARCH 16, 2022

 

7-Day Average Positivity Under 2% Over Past 12 Days

18 COVID-19 Deaths Statewide Yesterday

 Governor Kathy Hochul today updated New Yorkers on the state's progress combating COVID-19.  

"We continue to see low numbers of cases and hospitalizations thanks to New Yorkers getting fully vaccinated and boosted," Governor Hochul said. "Let's continue to use these tools so we can continue to move forward through this pandemic safely.”

Today's data is summarized briefly below:  

• Test Results Reported – 133,109
• Total Positive - 2,072
• Percent Positive – 1.56%
• 7-Day Average Percent Positive - 1.65%
• Patient Hospitalization - 1,034 (-36)
• Patients Newly Admitted - 141
• Patients in ICU - 158 (-14)
• Patients in ICU with Intubation - 92 (-3)
• Total Discharges - 288,744 (+165)
• New deaths reported by healthcare facilities through HERDS - 18
• Total deaths reported by healthcare facilities through HERDS - 54,994

The Health Electronic Response Data System is a NYS DOH data source that collects confirmed daily death data as reported by hospitals, nursing homes and adult care facilities only.

• Total deaths reported to and compiled by the CDC - 69,910

This daily COVID-19 provisional death certificate data reported by NYS DOH and NYC to the CDC includes those who died in any location, including hospitals, nursing homes, adult care facilities, at home, in hospice and other settings.  

• Total vaccine doses administered - 37,255,385
• Total vaccine doses administered over past 24 hours – 14,049
• Total vaccine doses administered over past 7 days – 89,904
• Percent of New Yorkers ages 18 and older with at least one vaccine dose - 91.9%  
•  Percent of New Yorkers ages 18 and older with completed vaccine series - 83.3%  
• Percent of New Yorkers ages 18 and older with at least one vaccine dose (CDC) - 95.0%  
• Percent of New Yorkers ages 18 and older with completed vaccine series (CDC) - 85.9%  
• Percent of New Yorkers ages 12-17 with at least one vaccine dose (CDC) - 82.1%  
• Percent of New Yorkers ages 12-17 with completed vaccine series (CDC) - 72.2%  
• Percent of all New Yorkers with at least one vaccine dose - 81.3%  
• Percent of all New Yorkers with completed vaccine series - 73.5%  
• Percent of all New Yorkers with at least one vaccine dose (CDC) - 89.3%  
• Percent of all New Yorkers with completed vaccine series (CDC) - 75.9%   

Each New York City borough's 7-day average percentage of positive test results reported over the last three days is as follows:

BOROUGH	Sunday, March 13, 2022	Monday, March 14, 2022	Tuesday, March 15, 2022
Bronx	0.49%	0.68%	0.70%
Kings	0.99%	1.28%	1.34%
New York	1.33%	1.67%	1.73%
Queens	0.79%	1.02%	1.05%
Richmond	0.99%	1.16%	1.18%

Bank Employee Sentenced To 24 Months For Defrauding Her Employer Of $1.7 Million

 

Damian Williams, the United States Attorney for the Southern District of New York, announced that GANGADAI RAMPERSAUD AZIM, a/k/a “Julie Azim,” was sentenced today to 24 months in prison for her role in a more than decade-long conspiracy to commit bank fraud, defrauding her employer, a Manhattan-based bank, by intentionally falsifying the bank’s books and records in order to misappropriate approximately $1.7 million. AZIM was sentenced by U.S. District Judge Katherine Polk Failla.

According to the allegations in the Complaint, court filings, and statements made during public court proceedings:

Between August 2008 and January 2021, AZIM, a long-time employee of a New York, New York-based bank (“Bank-1”), stole approximately $1.7 million from her employer.  Over the course of approximately 12 years, AZIM executed hundreds of wire transfers of Bank-1 funds to co-conspirators and related companies, who then sent portions of the ill-gotten funds to AZIM’s personal bank account. 

In furtherance of her scheme to defraud Bank-1, AZIM repeatedly made false entries in Bank-1’s systems, misappropriating funds paid to Bank-1 by its clients to satisfy outstanding loan obligations and then extending the maturity dates of those loan obligations, making it appear as though the loan obligations had not yet been paid.  When even the fraudulently extended maturity dates came due, AZIM originated new, fraudulent loans, to help conceal the scheme.  AZIM utilized the proceeds of those fraudulent loans to satisfy the loans for which she had previously stolen the client payments.  Over the course of approximately 12 years, between 2008 and 2020, AZIM caused approximately 200 improper wire transfers of Bank-1’s funds, each for an amount under $10,000, to be sent to third party accounts, including those of co-conspirators and related companies, which then returned portions of those funds to AZIM.  In doing so, AZIM abused her position at Bank-1 and enriched herself at the expense of her employer.   

In addition to the prison sentence, AZIM, 59, of Richmond Hill, New York, was sentenced to three years of supervised release and ordered to pay $1,685,723.18 in restitution and to forfeit $1,523,431.30 in criminal proceeds.

Ms. Williams praised the outstanding investigative work of the New York Field Office of the Federal Bureau of Investigation in this case.

STATEMENT FROM MAYOR ERIC ADAMS AND COMMISSIONER MANUEL CASTRO ON RESTORING OUR ASYLUM SYSTEM BY ENDING TITLE 42

 

“At a time when people are fleeing armed conflict in Ukraine and seeking safety and refuge in the U.S., we join the national call to action to restore our asylum system by ending the Title 42 policy, a Trump-era policy that used the pandemic as a pretext to turn away asylum seekers. Asylum is a human right and asylum seekers deserve to be welcomed with dignity.”

 

Permits Filed For 978 Summit Avenue In Highbridge, The Bronx

Permits have been filed for a 13-story mixed-use building at 978 Summit Avenue in Highbridge, The Bronx. Located between West 162nd and West 164th Streets, the lot is near the 161st Street -Yankee Stadium subway station, serviced by the B, D, and 4 trains. Moses Freund of The Vaja Group is listed as the owner behind the applications.

The proposed 137-foot-tall development will yield 56,397 square feet, with 48,695 square feet designated for residential space, 4,885 square feet for commercial space, and 2,817 square feet for community facility space. The building will have 72 residences, most likely rentals based on the average unit scope of 676 square feet. The concrete-based structure will also have a 15-foot-long front yard and 22 enclosed parking spaces.

S. Wieder Architect is listed as the architect of record.

Demolition permits have not been filed yet. An estimated completion date has not been announced. 

Joint Statement From Governor Kathy Hochul And Deputy National Security Advisor For Cyber And Emerging Technology Anne Neuberger Following Meeting At Joint Security Operations Center

"Today's meeting of local, state and federal partners is part of a new era of collaboration in protecting our critical infrastructure and citizens from cyber attacks." 

 

"President Biden has made it a priority to bolster the nation's cybersecurity networks, improving information-sharing between the U.S. government and the private sector and strengthening the United States' ability to respond to incidents when they occur." 

 

"New York is also leading the nation on efforts to harden cyber defenses and recently launched the first-of-its kind Joint Security Operations Center (JSOC) to serve as the nerve center for the State's cyber operations, where city, state and federal cyber experts will work alongside one another collecting intelligence on potential threats, keeping an eye out for intruders and breaches, and quickly responding to cybersecurity threats and incidents. This is a joint effort with Mayors Eric Adams, Kathy Sheehan, Ben Walsh, Byron Brown, Malik Evans, Mike Spano, and the State is also investing $30 million to support local government cyber efforts." 

 

"Together, we commit to working collaboratively with our local and private sector counterparts to keep New York's critical infrastructure safe and secure. We hope this collaboration will serve as a model for others across the country."