Russoniello said instead the pair diverted approximately $1.2 million of those funds for personal expenses, including home mortgages, vehicles and gambling.
The indictment also alleges that they used hidden accounts to trade shares in their company to generate an additional $1.6 million in profits. They have been charged with securities fraud, obstruction of justice, false statements to accountants, falsifying records and conspiracy.
After their arrest Monday, both of the Hamedanis were brought before Federal Magistrate Edward Chen in San Francisco. They were each released on a $500,000 bond, placed on home detention and forced to submit to electronic monitoring. They were to return to court July 30 to appear again before Judge Chen.
Sentences for the charges could range from five to 25 years and carry large financial penalties as well.
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