CHICAGO (TIP)The Securities and Exchange Commission has charged two top Indian-American former executives in greater Chicago area in the accounting fraud scheme, alleging that they siphoned off more than $4 million from the company over nearly five-year period. A criminal information filed in federal court in Chicago charged Quadrant 4 executives Nandu Thondavadi 63, of North Barrington, and Dhru Desai, 55, of Barrington, with wire fraud. Nandu Thondavadi was CEO of Schaumburg-based Quadrant 4 System, and Dhru Desai was its chief financial officer and chairman.

Quadrant 4 provides software products, platforms and consulting services to customers in the healthcare and education sectors. In 2015 the SEC launched an investigation of Quadrant 4 based on indications that the firm may have violated federal securities laws. The FBI initiated an investigation of Quadrant 4 in 2016. As set forth in the information against Thondavadi and Desai, the investigation revealed that Thondavadi and Desai engaged in a wide-ranging scheme to defraud Quadrant 4’s shareholders by misappropriating more than $3 million from the company, fraudulently inflating Quadrant 4’s revenue, and regularly concealing Quadrant 4’s liabilities. The information charges that Thondavadi and Desai certified false SEC reports.

The fraud scheme also involved numerous misrepresentations related to Quadrant 4’s acquisitions, including misrepresentations about the terms of Quadrant 4’s purchase of Momentum Mobile in 2013. As set forth in the charges, the investigation further revealed that Thondavadi and Desai attempted to obstruct the SEC’s investigation of Quadrant 4 as it related to the Momentum Mobile acquisition.