The U.S. Securities and Exchange Commission on Tuesday accused the former CEO of tech company Polycom of engaging in a long-running scheme of expense abuse, saying Andrew Miller used corporate funds to pay for $190,000 in personal perks that were not disclosed to investors.
From approximately 2010 until his resignation as CEO in July 2013, the SEC said in a civil complaint, Miller fabricated, and directed others to falsify, expense reports to “create the false impression that the payments he sought from Polycom were for ‘business’ expenses’ rather than personal charges.”
The perks allegedly included everything from meals at upscale restaurants and spa treatments to dress shirts from high-end retailers and at least $10,000 worth of tickets to baseball and football games. Another $5,000, the SEC said, went toward plants and a plant-watering service at Miller’s San Francisco apartment.
“CEOs are stewards of corporate assets and must be held to the highest standard of honesty and integrity,” Andrew J. Ceresney, director of the SEC’s Division of Enforcement, said in a news release. “We will not hesitate to charge executives with fraud when they allegedly use a public company as a personal expense account and hide it from investors.”
Separately, Polycom has agreed to pay $750,000 to settle SEC charges that it had inadequate internal controls and failed to report Miller’s perks to investors.
The case against Miller, 55, was filed in San Francisco federal court. According to the government, he accomplished his scheme by, among other things, using a company credit card to charge personal expenses and then obtaining reimbursement from Polycom for those charges by submitting expense reports with bogus business descriptions.
On one occasion, Miller allegedly charged $342.70 to the Polycom card for a restaurant meal in Washington, D.C., describing his guests as employees of a customer and the meal as a “customer meeting.” In fact, the SEC said, he dined with his brother and other family members, “none of whom were Polycom customers.”
In 2012 alone, according to the complaint, Miller charged Polycom for more than $115,000 in personal expenses despite publicly reporting that he received less than $35,000 in perks that year.