SEC settled charges telecom service company executives with accounting fraud
The Securities and Exchange Commission charged Tangoe Inc., formerly a public telecommunications expense management company, and four of its executives for allegedly using fraudulent accounting practices to artificially boost company revenues. Tangoe Inc. allegedly improperly recognized approximately $40 million of revenue out of a total of $566 million reported between 2013 and 2015, according to the SEC complaint. Tangoe did this by allegedly reporting revenue prematurely for work that had not been performed, including service prepayments, and by recording transactions that did not produce any actual revenue. Donald J. Farias, the former senior vice president of expense management, allegedly falsified business records, some of which were provided to Tangoe’s external auditors. The SEC charged the former CEO Albert R. Subbloie, former CFO Gary R. Martino, and former vice president of finance Thomas H. Beach with violating provisions of the federal securities laws. Tangoe agreed to settle the charges and to pay a penalty of $1.5 million. Subbloie, Martino, and Beach have also settled charges and agreed to pay $100,000, $50,000, and $20,000, respectively. All settlements are subject to court approval and none of the defendants have admitted or denied the allegations. The case against Farias continues.
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