The chief executive of a US IT services company has been indicted for fraud amid accusations that he lied about the reliability, availability, and security of his firm's data center.
Deepak Jain, 49, of Potomac, was the CEO of an information technology services company - referred to as Company A - that provided data center services to customers, including the Securities and Exchange Commission (SEC).
Between 2012 and 2018, the SEC paid the firm around $10.7 million for the use of the Beltsville, Maryland data center.
But according to the SEC, Jain secured the contract partly on the basis of an audit from the 'Uptime Council' - an organization he himself had created. In fact, such certifications are given out by the similarly-named Uptime Institute.
He drafted fake Uptime Council certification letters, falsely claiming that the Uptime Council had certified the company's data center as a Tier IV data center.
This would have given it the highest possible rating for reliability, availability, and security, with at least 99.995% uptime.
And the contract didn't go well, according to the SEC, with issues with security, cooling, and power — all of which were covered by the standard referenced in the fraudulent certification letters.
"As alleged in the indictment, Jain orchestrated a years-long scheme to defraud the SEC by falsely certifying that his company’s data center met the highest rating level, when the actual rating did not satisfy the SEC contract," said principal deputy assistant attorney general Nicole M. Argentieri, head of the Justice Department’s Criminal Division.
"Jain allegedly sought to enrich himself and his company at the expense of the reliability, availability, and security of the SEC’s electronic data. Yesterday’s charges make clear that the Criminal Division will not tolerate fraud schemes that threaten the security of the government’s electronic data."
Jain has been charged with six counts of major fraud against the United States and one count of making false statements. If convicted, he faces up to 10 years in prison on each count of major fraud and up to five years for making false statements.
"This indictment demonstrates our shared commitment with the Justice Department to hold bad actors accountable for engaging in schemes to defraud the SEC that undermine the integrity and fairness of the government procurement process,” said inspector general Deborah Jeffrey of the SEC.
Jain is contesting the charges.
“Deepak Jain and his company performed fully under the SEC contract," said his attorney, Steve McCool. "There is no evidence that any data was lost or compromised in any way. Mr. Jain is an innocent man who looks forward to confronting these charges at trial."
