Techstartup RIP 10.10.08: Entellium

Tech Startups 3.0 · October 10, 2008 · Short URL: https://vator.tv/n/472
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Source: http://openwebdeveloper.sys-con.com/node/705650

Entellium Duo Charged with Cooking Books, Ripping Off VCs
Pair conned about $50 million from investors like Ignition Partners and Sigma Partners
"TheĀ FBI arrested former Entellium CEO Paul Johnston and CFO Parrish Jones Tuesday night and on Wednesday the pair was hauled into district court in Seattle to face criminal charges of wire fraud.

Seems they kept two sets of books: one that they allegedly used to con about $50 million from investors like Ignition Partners and Sigma Partners and the real ones that weren't anywhere near as bonnie.

According to the FBI and the U.S. Attorney's Office, a set of books marked "board books" was discovered a couple of weeks ago by the company's HR VP when she was cleaning out the desk of the start-up's former VP of sales. They wound up with the company's controller, then the board and its legal counsel, who blew the whistle and called the cops.

The fake books show that the board was told the company had revenues of $4 million in 2006 when they were in fact $582,789; that the revenues last year were $6.7 million when they were really $1.4 million; and that they were $5.2 million this year when they were only $1.7 million, according to the U.S Attorney."


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