Two former executives at telecom software group Mobileum have been charged with fraud in connection with the company’s $915m sale to HIG Capital in 2022, according to a report by Bloomberg.
Andrew Warner, Mobileum’s former chief financial officer, and Kishore Vangipuram, the company’s former chief of delivery, are reportedly charged with artificially inflating the valuation of the business ahead of its sale by Audax Group to HIG. Mobileum later filed for bankruptcy in 2024.
Prosecutors allege the pair manipulated the billing of unfinished projects to make them appear closer to completion than they were, generating inflated revenue and earnings figures presented to HIG ahead of the transaction. The executives allegedly received more than $10m from the deal.
Both face charges including securities fraud, wire fraud, and conspiracy, each carrying potential prison sentences of up to 20 years if convicted.
According to prosecutors, Mobileum provided HIG with projections showing annual revenue of $247m and adjusted earnings of $84m, figures later found to be based on false accounting. HIG allegedly uncovered the fraud only after completing the acquisition in March 2022 and said the indictment supports claims made in a civil lawsuit it filed in 2023.
Audax said in a statement that it had no knowledge of, or involvement in, the alleged misconduct. The case is being heard in the US District Court for the Southern District of New York.
