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Press Release

Third Former Executive Of Telecommunications Company Charged In Scheme To Defraud Investors

For Immediate Release
U.S. Attorney's Office, Southern District of New York

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of an indictment charging ANTHONY SIROTKA, the former chief administrative officer of a FTE Networks, Inc. (“FTE”), along with the company’s former chief executive officer, Michael Palleschi and former chief financial officer, David Lethem, with conspiracy, securities fraud, wire fraud, improperly influencing the conduct of an audit and aggravated identity theft.  These charges stem from a years-long scheme to inflate FTE’s revenue and to conceal liabilities and expenses.  SIROTKA was arrested this morning and was presented today in Manhattan federal court.  Palleschi and Lethem were previously arrested based on an indictment charging them with the same crimes.

U.S. Attorney Damian Williams said:  “As alleged, Anthony Sirotka conspired with his co-defendants to lure investors with false claims about FTE’s financial condition and to make the company appear more profitable than it was.  Sirotka helped to deceive FTE’s auditors and the investing public, and now faces serious criminal charges for his alleged conduct.”

According to the allegations in Indictment unsealed today in Manhattan federal court:[1]

FTE was a telecommunications company based in Naples, Florida and Manhattan.  As of December 2017, its stock traded on the NYSE American market.  SIROTKA served as the company’s Chief Administrative Officer, Senior Vice President of Business Development, and Chief Business Development Officer.  Together with Palleschi and Lethem, among other things, SIROTKA caused FTE to recognize more than $13 million in fraudulent revenue.  This fraudulent revenue included more than $10 million in “unbilled” revenue that the defendants represented FTE had earned from services it had supposedly provided to a large customer that would not yet accept bills for those services.  FTE never provided any such services.  In addition, the defendants caused FTE to recognize approximately $2.6 million as an account receivable for which there was no support.  When FTE’s auditors said that the account receivable should be written off, SIROTKA and his co-conspirators created a fake email from a representative of the customer saying that the customer would “expedite payments” for more than $1.5 million for projects completed by FTE in 2016 and 2017.  The defendants caused this fake email to be sent to FTE’s auditors so that FTE could continue to recognize the receivable. 

As a result of the defendants’ fraudulent recognition of revenue, FTE’s financial statements overstated the company’s accounts receivable by between 18% and 120% for each of the quarters in 2017 and 2018 and by approximately 477% for 2016.

In a separate action, the United States Securities and Exchange Commission (“SEC”) filed civil charges against SIROTKA.  The SEC previously filed civil charges against Palleschi and Lethem.

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SIROTKA, 55, of New York, New York, is charged with one count of conspiring to commit securities fraud, wire fraud, making false statements in SEC filings and improperly influencing the conduct of audits, which carries a maximum sentence of five years in prison; one count of securities 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; one count of improperly influencing the conduct of audits, which carries a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory minimum term of two years in prison. 

The minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Mr. Williams praised the investigative work of the FBI and thanked the SEC for its assistance.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys James McMahon and Daniel Loss are in charge of the prosecution.

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


[1] 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.


Nicholas Biase
Victoria Bosah
(212) 637-2600

Updated April 19, 2023

Press Release Number: 22-184