The Securities and Exchange Commission paid $10.7 million to store its electronic data at a Maryland facility that was allegedly certified by a company that does not exist.
AiNET Corp. and its former CEO Deepak Jain recently agreed to pay $1.8 million to settle allegations that they violated the False Claims Act by knowingly defrauding the government. The settlement does not contain an admission of guilt.
Key facts: When the SEC began looking for a new data center in 2012, it required applicants to have a Tier III certification. That means the data center is fully operational even when undergoing maintenance.
Jain submitted paperwork to the SEC showing that AiNET had been certified by the company Uptime Council. No such company exists.
The Department of Justice later alleged that Jain wrote the certification letters himself, and that nobody had ever inspected AiNET’s data center. Jain allegedly purchased a web domain for Uptime Council to make it appear like a legitimate business.
The name also closely resembled the Uptime Institute, a legitimate company that certifies data center infrastructure.