Security & Fraud

SEC Charges ex-iPayments Executives With Million Dollar Scheme

The Securities and Exchange Commission announced Friday (March 11) that it has lodged charges against two ex-executives at a credit card processing company for masterminding a scheme to steal millions of dollars through fake expense reimbursements, invoices that were inflated and other improper accounting tactics.

The SEC’s complaint is against iPayment’s then-Senior Vice President of Sales and Marketing Nasir N. Shakouri and then-Executive Vice President and Chief Operating Officer Robert S. Torino. The complaint alleges the two routinely reimbursed themselves for payments that were never actually made to third-party vendors using their personal credit cards.

They also allegedly conspired with vendors to inflate invoices and receive kickbacks from the overpayments. In addition, the two are charged with claiming improper commissions and bonuses related to other corporate funds they improperly diverted in various ways.

The SEC also charged three other iPayment executives — Bronson L. Quon, John S. Hong and Jonathan K. Skarie — with playing a role in the scam and helping Shakouri and Torino falsify books and records to hide the thefts of corporate funds. Quon, Hong and Skarie were allegedly rewarded for their assistance with misappropriated iPayment funds, the SEC said in the release.

“As alleged in our complaint, these executives manipulated iPayment’s internal accounting systems, lied to the external auditor and caused approximately $11.6 million in losses to the company,” said Sanjay Wadhwa, senior associate director of the SEC’s New York regional office.

In a parallel action, the U.S. Attorney’s Office for the Central District of California today announced criminal charges against Shakouri and Torino. The SEC is seeking disgorgement of their gains, plus interest and penalties.



B2B APIs aren’t just for large enterprises anymore — middle-market firms and SMBs now realize their potential for enabling low-cost access to real-time payments and account data. But those capabilities are only the tip of the API iceberg, says HSBC global head of liquidity and cash management Diane Reyes. In this month’s B2B API Tracker, Reyes explains how the next wave of banking APIs could fight payments fraud and proactively alert middle-market treasurers to investment opportunities.

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