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SAN FRANCISCO — A U.S. District Court judge on Friday sentenced a former Silicon Valley tech entrepreneur to 18 months in federal prison for defrauding investors into supporting a software-as-a-service company he founded, authorities said. sentenced.
Manish Lakhwani, 47, of Los Altos, pleaded guilty in April 2023 to two counts of wire fraud and one count of securities fraud, the U.S. Attorney’s Office announced in a news release.
Mr. Lachwani founded HeadSpin Inc. in 2015 and served as the company’s chief executive officer until May 2020. The company provided clients with software tools and access to remote devices to test mobile applications.
From April 2017 to April 2020, HeadSpin raised more than $100 million from investors.
Citing Ratchwani’s plea agreement, the U.S. Attorney’s Office acknowledged that he provided investors with information about the company’s business, customers, revenue and finances that he knew to be inaccurate in order to obtain the funds. announced.
Authorities said Lakhwani also provided false information about customer contracts that had been included in the company’s financial statements and invoices that Lakhwani knew to show amounts that were not actually billed to customers. He also admitted to intentionally sending the message to Headspin’s accountant.
“This defendant admitted that he lied about his company’s revenues and customers in order to raise money from investors, including many in Silicon Valley,” U.S. Attorney Ismail J. Ramsey said in a statement. ” he said. “Today’s ruling should send a message to other entrepreneurs who may be tempted to cross the line of fraud and ‘fake it ’til you make it.”
Ratchwani replaced Headspin as CEO in 2020 when the allegations came to light.
In addition to his prison sentence, Mr. Lakhwani was ordered to pay a $1 million fine and serve three years of supervised release, beginning after the end of his sentence.
A public hearing on the compensation issue is scheduled for July 31, 2024.
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