NCI controller accused of embezzling $18M over six years

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.

About the Author

Mark Hoover is a senior staff writer with Washington Technology. You can contact him at, or connect with him on Twitter at @mhooverWT.

Reader Comments

Sat, Apr 15, 2017

Where was the CFO in all this? I think he should be questioned too. He is ultimately responsible for the control environment. Shame on the leadership team and frankly the accounting team for not questioning what are clear control deficiencies.

Thu, Apr 6, 2017

To the first comment on the article: Audit firm was Deloitte, as clearly stated in the 10-K, and audits are not designed to detect fraud.

Tue, Jan 24, 2017

If I understand this correctly, the money stolen was accounted for as allowable costs. On Government contracts that means it was in their G&A, Fringe or Overhead. Seems to me that their financial systems are compromised and they should have to re-price each and every contract that they have and or are preforming on and lower their costs and refund already billed amounts. These are my dollars as a taxpayer and I would hope that any future awards be put on hold until such time that NCI can demonstrate that they are going to be good stewards of the taxpayers money. Since October according to their press releases they have won 200 Million of DoD work, all would have had fraudulent indirects and should require immediate reconciliation or termination. Does anyone know, if by the Federal Acquisition Regulations if this should nullify their awards or do they get a pass for not doing due diligence and I the tax holder end up footing the bill.

Tue, Jan 24, 2017

If you look at the 10-K, it was Deloitte.

Tue, Jan 24, 2017

Auditors are Deloitte & Touche since 2013, and Ernst & Young from at least 2006-2012.

Show All Comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above.


WT Daily

Sign up for our newsletter.

Terms and Privacy Policy consent

I agree to this site's Privacy Policy.