SEC Charges Telecommunications Expense Management Company With Accounting Fraud

The Securities and Exchange Commission today charged a telecommunications expense management company for its use of fraudulent accounting practices that artificially boosted company revenues between 2013 and 2015. Four former members of the company’s senior management team were also charged for their roles in the alleged misconduct. As alleged in the complaint, Tangoe Inc., formerly a public company headquartered in Connecticut, improperly recognized approximately $40 million of revenue out of the total of $566 million reported between 2013 and 2015. In some instances, Tangoe allegedly reported revenue prematurely for work that had not been performed, including service prepayments, and for transactions that did not produce any revenue at all. The SEC alleges that Donald J. Farias, a Tangoe executive, falsified business records, some of which were provided to Tangoe’s external auditors to support revenue recognition decisions.