NCI controller accused of embezzling $18M over six years
- By Mark Hoover
- Jan 23, 2017
NCI Inc. has accused its controller of embezzling approximately $18 million over the last six years and has fired him.
The controller, who remained unnamed in the press release, was said to have acted alone, and NCI has launched an internal investigation with the help of outside counsel and forensic accountants.
Washington Technology has reached out to the company for comment and confirmation of the controller's identity.
The controller allegedly embezzled $5 million in 2016 and $13 million over the prior five years, and these amounts of money were reflected as expenses in the company’s financial statements.
The unaudited financial statements for the nine-month period ending Sept. 30, 2016, contain material errors related to the theft; therefore, the unaudited financial statements contained in the company’s quarterly reports on Form 10-Q for the first three quarters of 2016 should not be relied upon by investors, the company said. NCI will provide amended financial results for that nine-month period soon.
NCI's stock plunged Monday, dropping 9.68 percent to $12.60.
The company does not believe there are misstatements relating to embezzled funds in the financial statements for fiscal 2015, 2014, and 2013; however, if misstatements are discovered, NCI said it will disclosure those findings at that time.
The company is also reviewing its internal controls over financial reporting. The company believes that material weaknesses existed in its internal controls during the periods that the embezzlement was occurring.
We will update this story with more information as it becomes available.
Mark Hoover is a senior staff writer with Washington Technology. You can contact him at firstname.lastname@example.org, or connect with him on Twitter at @mhooverWT.