Indian American tech professional from California sentenced for fraud

April 22 :
For wire and securities fraud, a tech professional of Indian American descent received an 18-month prison term earlier this week. The Silicon Valley-based company HeadSpin was founded and operated by Manish Lachwani. On April 23, 2023, Lachwani pleaded guilty to two counts of wire fraud and one count of securities fraud.

Court records show that his company let clients use his software and remote devices to test mobile apps. Between April 2017 and April 2020, investors raised almost $100 million for HeadSpin. However, Lachwani admitted that he had misled potential backers about the company's clients, operations, income, and finances.

U.S. Attorney Ismail J. Ramsey stated, "This defendant admitted he lied about his company's revenue and customers to attract funding from investors, including many in Silicon Valley." The message that other business owners should take away from today's punishment is that it's not acceptable to "fake it until you make it" or to engage in fraudulent practices. To prevent startups from trying to cut costs or falsify their finances, this office is devoted to safeguarding investors. These investors include the ones whose money drives innovation in Silicon Valley.

In addition to Lachwani's prison sentence, Judge Breyer ordered him to serve three years of supervised release after his sentence ends. A $1 million fine was also imposed on Lachwani, and a hearing to discuss reparations was set for July 31, 2024. This matter is being handled by the US Attorney's Office's Corporate and Securities Fraud Section. A Federal Bureau of Investigations (FBI) inquiry led to the prosecution.