AUSTIN (Nexstar) — Last week, a Federal Grand Jury indicted former Lottery.com executive Vadim Komissarov on several charges, including conspiracy to commit securities fraud, making false filings with the Securities and Exchange Commission (SEC) and obstruction of justice. The news came just eight days after a lawyer accused former Lottery.com executives (not including Komissarov) of working with the Texas lottery to defraud Texans in an April 2023 Lotto Texas drawing.
According to charging documents, Komissarov worked to artificially inflate the revenue of Austin-based company AutoLotto (later known as Lottery.com) prior to having the publicly-traded company he was representing buy AutoLotto. To do so, authorities allege Komissarov created sham transactions and then lied in filings to investors and the SEC.
Needing to find a company to buy — fast
Komissarov operated Trident Acquisitions Corp. (TDAC), a Special Purpose Acquisition Company (SPAC). SPACs are an alternative way for people to get in as the first public investors in a company, having money raised from an initial public offering (IPO) put in a trust. The trust’s managers can then use the money to acquire a company attempting to make money for themselves and for the investors in the SPAC. However, if a company cannot be acquired within a specified time frame, money is returned to investors — which effectively wastes the time of the founders and managers of the SPAC.
“The founders and management team of a SPAC are highly incentivized to complete an acquisition within their deadline, regardless of the benefits of that transaction for the public shareholders of the SPAC,” the charging documents stated.
The indictment alleges TDAC was approaching that deadline when Komissarov decided to target Austin-based AutoLotto (later renamed Lottery.com) in November 2020, working with two former AutoLotto executives to “improperly and misleadingly inflate AutoLotto’s revenue and to report those inflated figures to TDAC’s shareholders through public filings.”
Sham agreements alleged
To start, Komissarov allegedly had a pair of AutoLotto executives (anonymously named as co-conspirators in the indictment) execute a sham agreement with a data company. On paper, the state alleges, AutoLotto earned $9 million to sell their data to the company, but in reality, AutoLotto paid $500,000 for the sham contract. To cover their tracks, the indictment alleges Komissarov sent $9 million to the company, which proceeded to send the money back so it could be registered as revenue.
With the newfound ‘revenue,’ Komissarov allegedly worked under the alias “Vlad” for a European company to help engineer the sale of two Mexican gaming companies to AutoLotto for $10 million, according to the indictment. The European company bought the Mexican gaming companies for only $1.080 million, but AutoLotto allegedly paid more than $10 million plus 228,702 AutoLotto shares (2.667% of the ownership total).
However, the indictment said AutoLotto never paid $10 million to the European company for the ownership stake. Instead, AutoLotto was the group that allegedly paid the $1.080 million directly for ownership of the gaming companies. The AutoLotto shares in the agreement were allegedly transferred over as compensation for agreeing to execute the sham agreement, the indictment alleges.
Indictment alleges sham and split
After TDAC merged with Lottery.com, Komissarov allegedly pressured former Lottery.com executives to sell $30 million of “media credits” to a second data company. Lottery.com then acquired a $30 million loan, using $30 million of its own money as collateral, transmitting that money (minus a $300,000 transaction fee) to the data company. Lottery.com also allegedly issued a sham invoice for $17.1 million “in large part, that Lottery.com had not been provided,” according to the indictment.
When all the alleged sham transactions were taken into account, the indictment alleges “$54.1 million of Lottery.com’s $68.5 million in reported revenue for 2021 (78.9%)” was fraudulent.”
The deal between TDAC and AutoLotto was approved in October 2021, the combined company changing their name to Lottery.com and appearing on the Nasdaq stock exchange. After a six-month required waiting period, and filing the company’s annual report with alleged “misstatements and misleading omissions,” Komissarov sold nearly 300,000 Lottery.com shares for more than $600,000, according to the indictment.
‘I am in deep, deep, deep, deep water’
The Federal Grand Jury also alleges Komissarov obstructed justice, telling his co-conspirators to lie to authorities and lying to authorities himself.
After Komissarov left the company, “new leadership publicly disclosed that they had identified errors in the company’s reported revenue and available cash.” This prompted an SEC investigation, which charging documents said Komissarov wanted no part of.
After receiving a federal subpoena, Komissarov allegedly called the former Lottery.com executives he worked with to get on the same page for the investigation, with charging documents claiming he said “guys, you do understand, you say that I was involved with transaction… if Trident and me specifically knew about it, then I am in deep, deep, deep, deep water… So if you come out and say that I was involved, then I am in deep (expletive).”
‘So, there’s no way to tie the Vlad back to you?’
As investigators were openly working on the case, Komissarov continually reached out to the pair of former Lottery.com executives he worked with on the encrypted messaging app Signal, according to the indictment. The indictment states that the pair of executives legally recorded one of their calls with Komissarov on July 22.
Komissarov is cited as saying, “we need to know what’s out there and what’s out there are the documents, emails, phone records that authorit[ies] was able to land their hands on and if they didn’t it means it doesn’t exist, is that right?”
During the call, one of the executives allegedly asked Komissarov “[Y]ou’re 100 percent confident there’s nothing that ties you and Vlad as obviously being the same person like that’s not a thing that we’re gonna find anywhere, you’re 100 percent sure–,” and Komissarov cut him off saying “yes.”
According to the indictment, Komissarov lied to SEC investigators during questioning, telling them “I don’t believe I did” when asked if he communicated with either of the former Lottery.com executives about the investigation. Upon investigators asking him if he acted as “Vlad” with the European company to facilitate the Mexican gaming deal, he allegedly replied “I did not. At least, that is my recollection that I did not.”
Komissarov could not be reached for comment through his LinkedIn account. Lottery.com declined to comment on these allegations, however, in response to allegations about their involvement in a controversial April 2023 Lotto Texas jackpot drawing, they said “Lottery.com completely cleaned house in late 2022 replacing its entire board of directors and executive management team.”
Credit: Source link
