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 disgraced 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 but it is difficult to believe they were not a party to much of the fraud.
Last month a Court in Deleware placed Communiclique in receivership (Chapter 7 Bankruptcy) and forwarded fraud changes to the US Attorney’s office.
One more time… Andy Powers Arrested By the FBI, will Ram Reddy and Tim Lee be next? Enjoy this imaginary glance at the FBI’s DCTech Crime Task Force Bulletin Board.
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 (Probably Tim Lee and Ram Reddy) for 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
- 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: used as evidence in the complaint quotes the blog post I highlighted here. Hahaha, 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 was 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)