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Press Release

Former CEO Of Houston-Based Seismic Data Acquisition Company Charged In Accounting Fraud Scheme

For Immediate Release
U.S. Attorney's Office, Southern District of New York
Defendant Also Misappropriated More than $5 Million from the Company

Audrey Strauss, Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment in Manhattan federal court charging JEFFREY HASTINGS, the former chief executive officer and chairman of the board of directors of SAExploration Holdings, Inc. (“SAEX” or the “Company”), a publicly traded seismic data company based in Houston, Texas, with securities fraud, wire fraud, and related offenses for his role in a scheme to fraudulently and materially inflate the publicly reported revenue of SAEX by tens of millions of dollars, in 2015 and 2016, and also for misappropriating millions of dollars from the Company.  HASTINGS was arrested on September 11, 2020, in Anchorage, Alaska, on a complaint (the “Complaint”) and presented before a magistrate judge in the District of Alaska on September 15, 2020.  The case is assigned to U.S. District Judge Gregory H. Woods. 

Acting Manhattan U.S. Attorney Audrey Strauss said:  “Jeffrey Hastings, the former CEO and chairman of the board of SAEX, and his co-conspirators, allegedly schemed to inflate the company’s revenue, thereby making the company appear more profitable than it was.   Hastings and his co-conspirators then stole money from SAEX to line their own pockets.  Thanks to the assistance of the FBI, Hastings’s trail of deceit has come to an end, and he now faces multiple fraud charges.”

FBI Assistant Director William F. Sweeney Jr. said:  “As alleged, Hastings and his co-conspirators stole approximately $12 million from SAEX.  They used a series of shell companies, and a company they claimed was independent from SAEX, to fraudulently inflate SAEX’s revenue, including by round-tripping millions of dollars stolen from SAEX.  Hastings and his co-conspirators used the rest of the stolen money, approximately $5 million, to pad their own pockets.  Today’s Indictment shows that illegal business dealings, even by a company’s highest executive, will be faced with intense scrutiny.” 

According to the allegations contained in the Complaint and the Indictment:[1]

At all times relevant to the Indictment until August 2016, HASTINGS was the executive chairman of the board of directors of SAEX.  After August 2016, HASTINGS served as both the chairman of the board of directors and the chief executive officer (“CEO”) of SAEX until he separated from the company in August 2019.  SAEX was a publicly traded seismic data acquisition company headquartered in Houston, Texas, that traded under the symbol “SAEX” on the NASDAQ.  SAEX provided land- and marine-based seismic acquisition services, including program design, planning, and permitting, camp services, survey, drilling, recording, and processing.  Seismic data is used by oil and gas companies to identify and analyze drilling prospects and maximize successful drilling.

From at least in or about October 2015 through at least in or about May 2019, HASTINGS, together with the then chief financial officer and general counsel of SAEX (“CC-1”), the founder, and at various times the president, CEO, and chief operating officer of SAEX (“CC-2”), and the then executive vice president of operations at SAEX (“CC-3”), devised and carried out a scheme to defraud SAEX and the investing public by artificially and materially inflating SAEX’s reported revenue by making it appear that Alaskan Seismic Ventures, LLC (“ASV”) was an independent and reliable source of tens of millions of dollars of revenue. 

In February 2015, HASTINGS and CC-1 discussed finding a way for SAEX to take advantage of certain tax credits offered by the State of Alaska to seismic data library companies, to offset the costs of exploring for oil and gas in Alaska (the “Alaska Tax Credits”).  The board of SAEX was opposed to operating its own data library company because of concerns about the ability to ensure payment to SAEX for seismic data, including through the monetization of Alaska Tax Credits, among other reasons.  To avoid the appearance that SAEX was operating a data library company that licensed data to third parties, HASTINGS and CC-1 set up ASV, to purport to operate as an independent customer purchasing seismic data from SAEX and licensing it to third parties.  HASTINGS recruited an acquaintance to serve as the owner and sole employee of ASV.  In truth and in fact, and as hidden from investors, ASV was not independent and could not pay SAEX for its seismic data. 

After setting up ASV, HASTINGS and CC-1 created and caused to be created a number of shell companies (the “Shell Companies”) for the purpose of secretly transferring funds from SAEX into ASV.  One of the Shell Companies, Global Equipment Solutions (“Global Equipment”), was purportedly an equipment rental company from which SAEX rented seismic acquisition equipment.  In truth and in fact, and as HASTINGS and his co-conspirators well knew, SAEX did not rent any equipment from Global Equipment and did not owe Global Equipment any money.  The co-conspirators took steps to make the payments from SAEX to Global Equipment appear legitimate to others at SAEX; for example, CC-1 drafted a lease agreement between SAEX and Global Equipment, and CC-3 caused fake purchase orders to be created that purported to show expenses incurred by SAEX as a result of renting equipment from Global Equipment.

By the end of 2015, SAEX had recorded on its books approximately $12 million in payables to Global Equipment.  HASTINGS and his co-conspirators ultimately routed approximately $5.8 million of SAEX’s funds through Global Equipment, and the other Shell Companies, to ASV.  That money then went from ASV back to SAEX to pay outstanding receivables.  The fact that these funds originated with SAEX was not disclosed to investors.  HASTINGS and his co-conspirators referred to this portion of the scheme as “round-tripping.”     In addition, HASTINGS and CC-1 took more than $5 million of the funds that SAEX transferred to Global Equipment for their own use, including making payments to CC-2 and CC-3, among others.   

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HASTINGS, 62, of Anchorage, Alaska, and British Columbia, Canada, is charged with one count of conspiracy to commit securities fraud and make false statements in annual and quarterly SEC reports, which carries a maximum sentence of five years in prison, one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison, one count of wire fraud, which carries a maximum sentence of 20 years in prison, and one count of securities fraud, which carries a maximum sentence of 20 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Ms. Strauss praised the investigative work of the FBI and also thanked the Securities and Exchange Commission, which has filed a civil enforcement action against the defendant, for its assistance in the investigation.

The case is being overseen by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Christine I. Magdo, Robert L. Boone, and Gina Castellano are in charge of the prosecution.

The charges contained in the Complaint and the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.


[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the Indictment, and the description of the Complaint and the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation. 


James Margolin, Nicholas Biase
(212) 637-2600

Updated October 8, 2020

Securities, Commodities, & Investment Fraud
Press Release Number: 20-230