Andy Powers Arrested BY The FBI (Updated)
The news yesterday… Communiclique (AKA Clique) CEO, Andy Powers Arrested by the FBI. To the investors who lost between $50 – $70 million, there could be no sweeter song. So let me sing that chorus again,
Andy Powers Arrested BY The FBI
And it is about time.
According to several sources, Andy Powers was taken into FBI custody on the morning of June 5th.
I’m told that people close to the case received the following email (altered to protect identities)
From: XXXXXX (WF) (FBI) <XXXXXX@fbi.gov>
Sent: Wednesday, June 5, 2019
Subject: Arrest of Andrew Powers
This email is to inform you that Andrew Powers was arrested by the FBI this morning in California.
Additional information will be provided when it is available.
Federal Bureau of Investigation
Powers founded Communiclique along with former CEO of Trustify Danny Boice, and Ram Reddy, in 2006. The company operated in Northern Virginia until the summer of 2018 when a court in Virginia found that Powers had falsified accounting records, grossly inflated revenue numbers and the companies valuation. At that time Powers packed up his things and moved his company to Los Angelos and his wife and five children into a $35 thousand dollar home in Southern California.
The company raised anywhere from $50 – $70 million in the capital. Through much of it under the “watchful” company “fiduciaries” CFO Tim Lee and Chairman of the Board, Ram Reddy. How much of the Fraud that is Communiclique was known by Lee and/or Reddy is unknown at this time. It is possible that they are cooperating with the FBI in exchange for leniency. It’s also possible, as improbable as it seems that a CFO and Chairman of the Board had no idea the company had virtually no customers or revenue. Reddy was Chairman of the Board for over a decade. Yet, Reddy’s attorney, John Rowley in a letter to me asserts, Reddy was an unwitting victim.
“These statements, and the others you have made in prior blog publications, are false and malicious and intended to harm Dr. Reddy’s personal and business reputations by imputing to him the commission of a crime. Contrary to your reckless accusations,· Dr. Reddy lost a substantial sum of money as a result of Powers’ deceit and he is one of the main victims of Powers’ fraud scheme. Your statements constitute defamation per se and will not be allowed to stand unanswered.”
Last month a Court in Deleware placed Communiclique in receivership (Chapter 7 Bankruptcy) and forwarded fraud changes to the US Attorney’s office.
Reddy was the Chairman of the Board for over a decade and repeatedly boasted about his involvement in obtaining customers and growing revenue (by way of example see this video).
In January 2016 Dr. Reddy sounded like an active Chairman of Board since 2007 and yet today he claims on his LinkedIn profile that he was not involved in the running and management of the company at any time.
Is it just me or does that not jive with the video? Reddy emphatically claims he is a victim of Andy Powers and not a criminal. According to Item 26 of the criminal complaint against Powers someone with the initials, PR which is likely Ram Reddy, the former Chairman of the Board claimed to the FBI that he merely, unknowingly passed on Powers fraudulent claims to others (see complaint below).
Got that? A man who claimed to help grow the business, capture customers and grow revenue, a man who was Chairman of the Board for over a decade now claims to be only an investor who is not involved in running or management of the company at all. Reddy, through an attorney in a letter to me, claims to be nothing but a victim in this scam. I guess that’s possible. Hard to believe but possible.
June 5, 2019, 5:30 Update: The criminal complaint reveals a few interesting new details (see the complaint here).
- It was filed under seal in the Alexandria VA, Federal Court on May 30.
- It includes an Affidavit in Support of a Criminal Complaint, Arrest Warrant, and Seizure Warrant.
- Filed by an FBI Special Agent
- Includes the Seizure of a 2015 GMC Yukon
- Asserts that Powers and others passed on fraudulent information (Possibly Tim Lee and Ram Reddy) while soliciting investments in Communiclique
- The company raised $20 million during the period of 2011 and 2018
- Powers and others working for him told investors that customers included: AirBnB, FedEx, Groupon, Intel, Polycom, Stapels, The Harford, Uber and Wilmer, and Hale. Under subpoena, these companies stated they were not customers of Communiclique. You can hear in the video above that Ram Reddy certainly claimed Uber and AirBnB were customers.
- Powers continually sent investors fraudulent company updates including company financials, customer wins, and corporate valuations
- Powers took a proposal from an investment bank and altered it into a statement of valuation from the investment bank
- Powers lied in an interview with the FBI that IBM and The Nerdery were channel partners and revenue producers for Communiclique. Under subpoena, IBM and Nerdery could not find that they had any business relationship with the company.
- Bank records revealed no evidence of any deposits from the customers claimed by Powers
- Powers told investors that the company was valued at $450 million (securities fraud)
- File under funny: A blog posed written by Powers was used as evidence in the complaint highlighted here. OMFG, who would have thought saying, ” I misled investors” would have come back to bite him?
- The FBI had Power’s residence in Pacific Palisades, California under surveillance at least a week prior to the arrest.
June 14, 2019 Update: On Thursday, June 13, Andy Powers appeared in front of a Judge in the Eastern District of Virginia, in Alexandria VA for Arraignment. US Attorney, Federal Prosecutor, Jack Hanly will represent the government against Powers. Powers pleaded poverty and requested a court-appointed public defender. (For more information on the prosecutor, check out this post)
Here is a copy of the Complaint
Powers Criminal Complaint by Glen Hellman on Scribd
See the Virginia Decision here
Virginia Communiclique Judg… by Glen Hellman on Scribd