SEC Charges Former Executive of Network Infrastructure Company with Accounting Fraud
Litigation Release No. 25406 / June 2, 2022
Securities and Exchange Commission v. Anthony Sirotka, Case No. 2:22-cv-00348 (M.D. Fla. filed June 2, 2022)
The Securities and Exchange Commission today charged Anthony Sirotka, the former Chief Administrative Officer and President of FTE Networks, Inc., a network infrastructure company formerly based in Naples, Florida, for his role in a multi-year accounting fraud. The alleged scheme conducted by Sirotka, along with two other senior executives previously charged by the Commission in July 2021, inflated the company's revenues for certain periods by as much as 108 percent.
According to the SEC's complaint, Anthony Sirotka helped FTE's former CEO, Michael Palleschi, and CFO, David Lethem, inflate FTE's revenue by directing the then-NYSE listed public company to improperly recognize revenue and related accounts receivable for nonexistent construction projects. The complaint also alleges that Sirotka, Palleschi and Lethem misled FTE's auditor about approximately $12.5 million in fictitious revenue and related accounts receivable, by, among other things, doctoring and forging documents and signatures in materials provided to the auditor.
The SEC's complaint, filed in the U.S. District Court for the Middle District of Florida, charges Sirotka with violating the antifraud and reporting provisions of the federal securities laws, and with aiding and abetting FTE's violations of the antifraud, reporting, books and records and internal controls provisions of the federal securities laws. The complaint seeks a permanent injunction, a civil money penalty, and an officer-and-director bar.
The U.S. Attorney's Office for the Southern District of New York announced criminal charges against Sirotka for related conduct.
The SEC's continuing investigation is being conducted by Sagiv Edelman, Kathleen E. Strandell, and Carol Der Garry, and supervised by Jessica M. Weissman and Glenn S. Gordon in the Miami Regional Office. The SEC's litigation is being led by Robert K. Levenson and supervised by Teresa Verges. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York and the Federal Bureau of Investigation.