Leader Of Miami Crew Sentenced To 63 Months In Prison For Defrauding Banks And Cryptocurrency Exchange Of More Than $4 Million
Damian Williams, the United States Attorney for the Southern District of New York, announced today that NIHAT CARDAK, the former Chief Financial Officer (“CFO”) of the Virginia-based email security company GigaMedia Access Corporation, d/b/a GigaTrust (“GigaTrust”), pled guilty today in Manhattan federal court in connection with a scheme to defraud investors and lenders of millions of dollars through false and misleading misrepresentations, including fabricated bank statements and audit reports, and by impersonating a purported customer, auditor, and GigaTrust lawyer. U.S. District Judge Paul G. Gardephe accepted the defendant’s guilty plea.
U.S. Attorney Damian Williams said: “Nihat Cardak, along with his co-defendants Robert Bernardi and Sunhil Chandra, chose to lie and mislead investors and lenders in order to keep GigaTrust afloat instead of owning up to the company’s financial reality. Their scheme came crashing down in 2019 as GigaTrust filed for bankruptcy, and Cardak and Bernardi have now accepted responsibility for their criminal actions.”
According to the allegations in the Indictment and other filings and statements made in court:
From in or about 2016 through at least in or about 2019, GigaTrust was a private company headquartered in Virginia that purported to be a market-leading provider of cloud-based content security solutions. Robert Bernardi founded GigaTrust and served as its Chief Executive Officer, while CARDAK and Sunil Chandra were GigaTrust’s CFO and Vice President of Business Development, respectively. The defendants devised a scheme to defraud investors and lenders by (i) fabricating and disseminating false and misleading bank account statements that overstated GigaTrust’s cash deposits; (ii) fabricating and disseminating false and misleading audit materials that purported to have been issued by GigaTrust’s auditors and overstated GigaTrust’s performance; (iii) forging and disseminating a false and misleading letter purporting to be from GigaTrust’s New York-based counsel; and (iv) impersonating or causing others to impersonate a purported customer and auditor of GigaTrust on telephone calls with a prospective lender.
Specifically, Bernardi sent fabricated audit materials to a New York-based investment firm, and Bernardi and CARDAK used fabricated bank statements to obtain multiple rounds of loans and investments for GigaTrust worth millions of dollars. After a New York-based bank (“Bank-1”), which had loaned GigaTrust $25 million, declared that GigaTrust had defaulted on the terms of its loan agreement, Bernardi and CARDAK induced additional investments in GigaTrust through, among other things, forging a letter purporting to be from GigaTrust’s New-York based counsel. Shortly thereafter, while negotiating another $25 million deal with a lender (“Lender-1”), Bernardi and CARDAK devised a scheme to impersonate a GigaTrust customer and auditor on requested diligence calls, which induced Lender-1 to make a $25 million loan to GigaTrust. Bernardi recruited Chandra to pose as one of GigaTrust’s alleged customers on a call with Lender-1. Bernardi and CARDAK also fabricated bank statements and sent them to Lender-1 right before closing the $25 million deal.
GigaTrust filed for Chapter 7 bankruptcy protection in the District of Delaware on or about November 27, 2019.
On August 17, 2022, Bernardi pled guilty to conspiracy to commit securities fraud, bank fraud, and wire fraud before Judge Paul G. Gardephe.
* * *
CARDAK, 52, of Clifton, Virginia, pled guilty to one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison.
The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. Sentencing for CARDAK is scheduled for May 16, 2023.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation in this case. Mr. Williams further thanked the Securities and Exchange Commission, which has filed a civil enforcement action against the defendants, for its cooperation and assistance in this investigation.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Peter J. Davis and Emily A. Johnson are in charge of the prosecution.
The charges contained in the Indictment against Sunil Chandra are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
 As the introductory phrase signifies, the entirety of the text of the Indictment constitutes only allegations, and every fact described herein should be treated as an allegation.