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Cybersecurity boss pleads guilty to defrauding own company

The former head of a data security company has pleaded guilty to using fake email accounts to defraud his own firm out of millions of dollars, a New York court heard.

Suni Munshani, 61, of Connecticut, entered the plea at a federal court regarding a scheme he masterminded over nearly a decade, and agreed to pay back $10 million in restitution after bilking his firm out of at least $6.5 million. The company was not named by the US Department of Justice (DoJ) but believed by Cybernews to be Protegrity.

Speaking on behalf of the DoJ, US Attorney Damian Williams said: “Not even a year into his appointment as CEO, Suni Munshani began betraying his employer’s trust and breaking the law, stealing millions of dollars to line his pockets. Company executives are given significant amounts of power, but today’s plea should send the message that this office will be ready to act if an executive chooses to abuse that power.”

Munshani is named in Crunchbase as having worked as CEO for Protegrity, described as a company positioned in the enterprise data security market, between 2011 and 2019.

Announcing the verdict, the DoJ said: “Between 2011 and 2019, Suni Munshani was the CEO of the Victim Company, which provided data security services to its clients. Within six months of his appointment as CEO, Munshani and others began an approximately nine-year scheme to defraud the Victim Company.”

This entailed setting up an email account associated with a bogus third-party contractor controlled by Munshani and used to correspond with the “victim” company, obtaining payments for services totaling $3 million.

Another $3.5 million was stolen from the company in a fabricated tax claim, which was “deposited into an unauthorized bank account created by Munshani in the name of the Victim Company.”

Munshani further scammed his own firm through fraudulent licensing and reseller agreements between it and two other companies, for which he submitted bogus invoices.

Munshani now faces up to five years in prison for a single count of wire fraud, with sentencing to be determined at a later date. The Federal Bureau of Investigation and the DoJ’s cybercrime unit helped to bring him to justice.

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