The Securities and Exchange Commission accused SAExploration Holdings (SAE) of perpetrating a $100 million accounting fraud that involved routing payments through shell companies so it appeared to be legitimate revenue.

According to the complaint, the former CEO and Chairman Jeffrey Hastings, former CFO and General Counsel Brent Whiteley, former CEO and COO Brian Beatty, and former VP of Operations Michael Scott booked $140 million worth of contracts with SAE through a supposedly unrelated company, Alaskan Seismic Ventures (ASV). This unrelated company ASV was actually formed by Jeffrey Hastings and Brent Whiteley, but was registered in the name of a business associate of Whiteley! If the actual owners were known to the company, per laws ASV would have to be reported as a subsidiary of SAE!

The executives recognized $100 million revenue from contracts with this so called unrelated entity on the books of SAE. Hence overstating the revenue of the company.Note any transaction between subsidiaries is actually called inter-company and is eliminated when the financials are consolidated.

They did not stop at that. The SEC’s complaint also alleges that the four executives also stole $10 million from the company!