Schaumburg company CEO, CFO arrested on fraud charges
The chief executive of a Schaumburg-based consulting firm is facing federal charges alleging he intentionally misrepresented the firm's cash flow and concealed its liabilities in filings with the U.S. Securities and Exchange Commission, authorities said Wednesday.
Nandu Thondavadi, 62, of North Barrington, was arrested Wednesday morning on charges of wire fraud, making false statements to the SEC and willfully certifying false financial reports. Thondavadi, the CEO of Quadrant 4 System Corp., could face up to 20 years in prison if convicted of wire fraud, authorities said.
Also arrested was Quadrant 4's chief financial officer, Dhru Desai, 55, of Barrington, on charges of wire fraud and willfully certifying false financial reports.
A criminal complaint filed Tuesday alleges Thondavadi certified filings that misrepresented and concealed from the company's auditors and shareholders the terms of certain acquisitions and the amount of a liability stemming from a lawsuit. The misrepresentations and concealments were intended to artificially inflate the publicly traded company's share price, according to the complaint.
Quadrant 4 provides software products, platforms and consulting services to customers in the health care and education sectors, federal authorities said. In addition to its Schaumburg headquarters, the company has offices in six other U.S. states as well as India.
Federal authorities said they launched an investigation of the company earlier this year based on indications that the firm's recent annual reports to the SEC contained false information. The investigation revealed that Thondavadi and Desai certified reports even though they knew the documents did not fairly present the true financial condition of the company, according to the federal complaint.
Thondavadi then lied under oath when questioned by the SEC in May, authorities allege.
As part of the investigation, federal authorities executed a search warrant Wednesday morning at Quadrant 4's corporate headquarters in the 1500 block of East Woodfield Road.
Quadrant 4 officials could not be reached for comment Wednesday.