Robert Bernardi, Nihat Cardak, and Sunil Chandra Raised Millions of Dollars from Investors and Lenders by Using Fabricated Documents and Impersonating a Purported Customer, Auditor, and Lawyer
Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that ROBERT BERNARDI, the founder, and former Chief Executive Officer of the Virginia-based email security company GigaMedia Access Corporation, d/b/a GigaTrust (“GigaTrust”), NIHAT CARDAK, GigaTrust’s former Chief Financial Officer, and SUNIL CHANDRA, GigaTrust’s former Vice President of Business Development, were charged in an Indictment in Manhattan federal court with participating in a scheme to defraud investors and lenders of millions of dollars through false and misleading misrepresentations, including fabricated bank statements and audit reports, and by impersonating a purported customer, auditor, and GigaTrust lawyer.
BERNARDI, CARDAK, and CHANDRA were arrested this morning. They will be presented later before Magistrate Judge Michael S. Nachmanoff in the United States District Court for the Eastern District of Virginia. The case is assigned to United States District Judge Paul G. Gardephe.
U.S. Attorney Damian Williams said: “As alleged, the defendants—the founder and other senior executives at GigaTrust—participated in a scheme to trick investors into providing the company millions of dollars. Today’s indictment alleging a fraud scheme of over $50 million ensures that they will be held accountable for their conduct.”
FBI Assistant Director-in-Charge Michael J. Driscoll said: “Luring investors under false pretenses and misappropriating their money for personal gain is exactly what Giga Trust’s defendants are charged with today. The money they allegedly made from this scheme totals tens of millions of dollars. No matter how lucrative schemes of this nature may appear from the start, they will ultimately result in federal criminal charges.”
According to the allegations in the Indictment unsealed today in Manhattan federal court:
From in or about 2016 through at least in or about 2019, GigaTrust was a private company headquartered in Virginia that purported to be a market-leading provider of cloud-based content security solutions. BERNARDI founded GigaTrust and served as its CEO, while CARDAK and CHANDRA were GigaTrust’s CFO and Vice President of Business Development, respectively. The defendants devised a scheme to defraud investors and lenders by (a) fabricating and disseminating false and misleading bank account statements that overstated GigaTrust’s cash deposits; (b) fabricating and disseminating false and misleading audit materials that purported to have been issued by GigaTrust’s auditors and overstated GigaTrust’s performance; (c) forging and disseminating a false and misleading letter purporting to be from GigaTrust’s New York-based counsel; and (d) impersonating or causing others to impersonate a purported customer and auditor of GigaTrust on telephone calls with a prospective lender.
Specifically, BERNARDI sent fabricated audit materials to a New York-based investment firm, and BERNARDI and CARDAK used fabricated bank statements to obtain multiple rounds of loans and investments for GigaTrust, worth millions of dollars. After a New York-based bank (“Bank-1”), which had loaned GigaTrust $25 million, declared that GigaTrust had defaulted on the terms of its loan agreement, BERNARDI and CARDAK induced additional investments in GigaTrust through, among other things, forging a letter purporting to be from GigaTrust’s New-York based counsel. Shortly thereafter, while negotiating another $25 million deal with a lender (“Lender-1”), BERNARDI and CARDAK devised a scheme to impersonate a GigaTrust customer and auditor on requested diligence calls, which induced Lender-1 to make a $25 million loan to GigaTrust. BERNARDI recruited CHANDRA to pose as one of GigaTrust’s alleged customers on a call with Lender-1. BERNARDI and CARDAK also fabricated bank statements and sent them to Lender-1 right before closing the $25 million deal.
GigaTrust filed for Chapter 7 bankruptcy protection in the District of Delaware on or about November 27, 2019.
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BERNARDI, 68, and CARDAK, 51, both of Virginia, are each charged with one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison, one count of conspiracy to commit bank fraud, which carries a maximum sentence of 30 years in prison, one count of conspiracy to commit wire fraud affecting a financial institution, which carries a maximum sentence of 30 years in prison, and one count of aggravated identity theft, which carries a mandatory consecutive sentence of two years’ imprisonment. CHANDRA, 80, of Virginia, is charged with one count of conspiracy to commit wire fraud affecting a financial institution, which carries a maximum sentence of 30 years in prison, and one count of aggravated identity theft, which carries a mandatory consecutive sentence of two years’ imprisonment. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation in this case. Mr. Williams further thanked the Securities and Exchange Commission, which has filed a civil enforcement action against the defendants, for its cooperation and assistance in this investigation.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Peter J. Davis and Emily A. Johnson are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
 As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.