NEW YORK (Reuters) - The former chief executive officer of an Alaska-based telecommunications company was charged on Thursday with forging contracts to secure investments of more than $250 million in a fiber optic cable network.
Elizabeth Ann Pierce, who was CEO of Anchorage-based Quintillion Networks until she resigned last year, surrendered to authorities Thursday morning, prosecutors said.
She was released on bail following a hearing in Manhattan federal court Thursday afternoon, according to Nick Biase, a spokesman for the office of U.S. Attorney Geoffrey Berman in Manhattan.
Joshua Lowther, a lawyer for Pierce, could not immediately be reached for comment.
The company said in a statement that “Quintillion values its partnerships with customers and investors and the alleged actions of Ms. Pierce are not aligned with how Quintillion conducts business.”
In a criminal complaint, prosecutors said that Pierce, 54, obtained investments in Quintillion from 2015 to 2017 by claiming that it had secured contracts with other telecommunications companies that guaranteed hundreds of millions of dollars in revenue from its planned fiber optic network in Alaska. The network was launched in the state last year.
In fact, prosecutors said, the contracts were fake. In some cases, Pierce forged counterparties’ signatures on contracts that never existed, while in others she altered real contracts to make them more favorable to Quintillion, prosecutors said.
A New York private equity fund invested more than $200 million in Quintillion based on Pierce’s claims about the contracts, making it the company’s majority shareholder, according to the complaint. It also helped arrange a $50 million loan through a French investment banking firm, the complaint said.
Quintillion’s majority shareholder as of August was New York-based Cooper Investment Partners LLC, according to public statements from the company. Quintillion announced in January 2017 that it had obtained $50 million in financing through France’s Natixis SA (CNAT.PA).
Cooper and Natixis, which were not named in court papers, could not immediately be reached for comment.
Prosecutors said the fraud was uncovered after a Quintillion employee sent an invoice to one of the other telecommunications companies based on a forged contract. It responded by producing the genuine contract, prompting Quintillion to investigate, according to the complaint.
Reporting by Brendan Pierson in New York; Editing by Richard Chang