In a case that could go down in history as the surest and easiest way to explain irony without reading Oedipus Rex, the CEO of a fraud prevention company was arrested yesterday on fraud charges. Adam Rogas, the founder of anti-fraud software firm NS8 (as well as its CEO, CFO and board member), has been accused of securities fraud and wire fraud by the Department of Justice.

The DOJ said that Rogas, between 2019 and earlier this month, falsely inflated his company's reported revenue and assets using falsified bank statements. He allegedly did so in order to present a false picture of the firm's financial health and convince investors to purchase securities in two fundraising rounds. These rounds netted NS8 $123 million, of which Rogas, by tendering shares he owned and controlled, took $17.5 million for himself.

For example, the DOJ's complaint showed a pair of bank statements, one from the bank itself and one apparently doctored by Rogas to deceive investors. In doing so, he is said have have turned deposits of $522.87 and $245.13 into deposits of $999,999.99, and a $720.45 deposit into a $500,000 deposit.

This information was then transferred to spreadsheets, which in turn informed the financial statements that he would send to investors or reference in presentations. Further, while in an attempt at transparency, Rogas is said to have launched a file-sharing database where people could see the documentation behind the financial information, but these were the falsified records.

The SEC (which has filed civil charges against Rogas in conjunction with the DOJ) said that an investor had hired a consultant to conduct a due diligence sweep and write a report, but the consultant viewed the falsified documentation and said everything checked out (which, as a note, does not speak well of this consultant, as few would disagree that $999,999.99 is a rather suspicious number, as is a flat $500,000, especially considering this was amid more prosaic deposits of $96.80 and $193.90).

The DOJ said the scheme unraveled when an employee of the company's finance department called its bank directly and found the account did not have the tens of millions of dollars they believed there to be but, rather, just tens of thousands. The employee, after discussing the matter with a colleague, contacted Rogas and told him about the problem. Rogas attributed it to a bank error that he said he was currently trying to fix, and said he would meet with the finance staff on Sept. 1 to give them access to the revenue bank account. The DOJ said he never showed up to the meeting and instead resigned that same day.