HeadSpin CEO Manish Lachwani pleads guilty to wire fraud

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Manish Lachwani pleaded guilty in federal court in San Francisco April 27, 2023, to wire fraud and securities fraud charges.

The guilty plea was in connection to a scheme to dupe potential investors into supporting the technology start-up he founded and led, announced United States Attorney for the Northern District of California Ismail J. Ramsey.

The guilty pleas were accepted by U.S. District Judge Charles R. Breyer.

Lachwani, 47, of Los Altos, Calif., founded Silicon Valley-based HeadSpin, a company that provided clients with software tools and access to devices to test mobile applications.

He founded the company in 2015 and served as its CEO until May 2020. Between April 2017 and April 2020, HeadSpin raised more than $100 million from investors over multiple rounds of fundraising, leading to a valuation of approximately $1.1 billion, the press release said.

According to his plea agreement, Lachwani admitted that he disseminated false and overstated revenue metrics to potential investors to lure investments into his company.

On August 4, 2022, a federal grand jury handed down a superseding indictment that charged Lachwani with 11 counts of wire fraud, one count of money laundering, and four counts of securities fraud in violation.

Pursuant to the plea agreement, Lachwani pleaded guilty to two counts of wire fraud and one count of securities fraud. If Lachwani complies with the plea agreement, the remaining counts will be dismissed at sentencing, the press release said.

Lachwani is currently released on bond.

Judge Breyer scheduled Lachwani’s sentencing hearing for September 27, 2023, at 10:00 a.m.

White the actual sentencing may be lower, the maximum statutory penalty for each count of wire fraud is 20 years in prison and a fine of $250,000. The maximum statutory penalty for securities fraud is 20 years in prison and a fine of $5 million, plus restitution if appropriate. In addition, as part of the sentence Lachwani may be ordered to pay additional fines and to serve an additional term of supervised release after any prison sentence.