SEC Charges Former Controller of Network Infrastructure Company with Accounting Fraud
Litigation Release No. 25543 / September 30, 2022
Accounting and Auditing Enforcement No. 4351 / September 30, 2022
Securities and Exchange Commission v. Daniel Moser, Case No. 2:22-cv-00629 (M.D. Fla. filed September 30, 2022)
The Securities and Exchange Commission today charged Daniel Moser, the former controller of FTE Networks, Inc., a network infrastructure company formerly based in Naples, Florida, for his role in a multi-year accounting fraud. This alleged scheme conducted by Moser, along with three senior executives previously charged by the Commission in July 2021 and June 2022, inflated the company's revenues for certain periods by as much as 108 percent.
According to the SEC's complaint, Moser helped FTE's former CEO, Michael Palleschi, CFO, David Lethem, and Chief Administrative Officer and President, Anthony Sirotka, inflate FTE's revenue by directing FTE to improperly recognize revenue and related accounts receivable for nonexistent construction projects. The complaint also alleges that Moser, together with Palleschi, Lethem, and Sirotka, misled FTE's auditor about approximately $12.5 million in fictitious revenue and related accounts receivable, by, among other things, providing false and misleading materials to the auditor.
The SEC's complaint, filed in the U.S District Court for the Middle District of Florida, charges Moser with violating the antifraud provisions of Sections 17(a)(1) and (a)(3) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5(a) and (c) thereunder, and Exchange Act Section 13(b)(5) and Rules 13(b)2-1 and 13(b)2-2 thereunder. The complaint also charges him with aiding and abetting violations of Section 10(b) of the Exchange Act and Rule 10b-5(b) thereunder, the reporting provisions of Exchange Act Section 13(a) and Rules 12b-20, 13a-1, 13a-11 and 13a-13 thereunder, and the books and records and internal controls provisions of Exchange Act Sections 13(b)(2)(A) and 13(b)(2)(B). Moser consented to a bifurcated settlement, subject to court approval, under which he will be enjoined from violating the charged securities laws. The court will determine the amount of a civil penalty upon further motion of the Commission.
The SEC's continuing investigation is being conducted by Sagiv Edelman, Kathleen E. Strandell, and Carol Der Garry, in the Miami Regional Office and supervised by Jessica M. Weissman and Glenn S. Gordon. 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.