(Adds Lime Energy CEO comment, paragraph 5)
By Nate Raymond
NEW YORK, Oct 17 (Reuters) - Lime Energy Co and four former executives have agreed to settle civil charges that they were involved in an accounting fraud at the Newark, New Jersey-based energy services provider, U.S. regulators said on Monday.
Lime Energy has agreed to pay $1 million to resolve a lawsuit filed by the U.S. Securities and Exchange Commission in Manhattan federal court accusing it of improperly booking $20 million in revenue from 2010 to 2012, the agency said.
“Lime Energy and its then executives engaged in a wide array of wrongdoing, including the improper reporting of a significant amount of fake revenue,” Scott Friestad, the SEC’s associate director of enforcement, said in a statement.
The SEC also reached deals with Joaquin Alberto Dos Santos Almeida, an ex-vice president of operations; Karan Raina, an ex-director of operations; Julianne Chandler, a former corporate controller; and James Smith, an ex-executive vice president.
“This settlement brings a close to a chapter that Lime Energy put behind us several years ago, a matter in which no current Lime Energy employees were involved,” Lime Energy Chief Executive Adam Procell said in a statement on Monday.
Lawyers for the executives either declined comment or had not immediate comment.
According to the SEC, while working in Lime’s utilities division, Almeida and Raina began recognizing millions of dollars of revenue on newly signed contracts earlier than appropriate.
Both became even more aggressive in 2011 and 2012 as they further recognized revenue earlier than allowed, eventually directing company accountants to book revenue on non-existent jobs, the SEC said.
The regulator further alleged that Chandler accepted new accounting entries for millions of dollars in additional 2011 revenue after the year-end close.
With the company needing $500,000 more to meet its 2011 revenue target, Smith in February 2012 sent Chandler new entries that provided Lime with even more revenue to improperly recognize, the SEC said.
Under the settlements, Smith and Chandler agreed to a five-year bar on serving as an officer of a publicly traded company and to pay $50,000 and $25,000, respectively. Chandler also agreed to be suspended from appearing before the SEC as an accountant.
Almeida agreed to a permanent officer-and-director bar, and Raina agreed to pay $50,000, the SEC said. All four former executives neither admitted nor denied the allegations.
The case is U.S. Securities and Exchange Commission v. Lime Energy Co, et al, U.S. District Court, Southern District of New York, No. 16-08088. (Reporting by Nate Raymond in New York; Editing by Frances Kerry and Peter Cooney)