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California techie sentenced for fraud
Manish Lachwani founded Silicon Valley-based HeadSpin in 2015
Representative Image / Canva
An Indian American tech professional was sentenced to 18 months in prison earlier this week for wire and securities fraud.
Manish Lachwani, who founded Silicon Valley-based HeadSpin in 2015 and served as its CEO, pleaded guilty on April 23, 2023, to two counts of wire fraud, and one count of securities fraud.
According to court documents, his firm provided clients with software tools and access to remote devices to test mobile applications. More than $100 million was raised by investors in HeadSpin between April 2017 and April 2020; however, Lachwani confessed that in order to secure this funding, he had given prospective investors false information regarding the company's operations, clients, income, and finances.
“This defendant admitted he lied about his company’s revenue and customers to attract funding from investors, including many in Silicon Valley,” said United States Attorney Ismail J. Ramsey. “Today’s sentencing should send a message to other entrepreneurs who may be tempted to cross the line into fraud and to ‘fake it until they make it.’ This Office is committed to protecting investors—including those whose capital powers the engines of innovation in Silicon Valley—from start-ups that misrepresent their finances and try to cut corners.”
Judge Breyer not only handed down a prison sentence to Lachwani, but also mandated that he serve three years of supervised release following the completion of his prison term. In addition to that, Lachwani was ordered to pay a $1 million fine and scheduled a hearing for July 31, 2024, to address the issue of restitution.
The case is being prosecuted by the Corporate and Securities Fraud Section of the United States Attorney’s Office. The prosecution is the result of an investigation by the FBI.
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