An IT company boss has been indicted for fraud after allegedly falsifying statements about the security of his firm’s data center to land contracts worth $10.7 million with US financial regulator the Securities and Exchange Commission (SEC).

Deepak Jain, 49, of Potomac, Maryland, was indicted by a grand jury in the District of Colombia on Tuesday.

According to the indictment, between 2012-2018, Jain’s company, which is not named, was paid approximately $10.7 million by the SEC for the use of its data center in Beltsville, Maryland.

Jain claimed his company’s data center had Tier IV certification, the industry standard for availability, reliability, and security that is administered by the Uptime Institute. Tier IV is the highest status available and is necessary to obtain a contract with the SEC

However, it is alleged Jain created a fake organization, the Uptime Council, to certify the company’s data center, and that it did not have a real Tier IV status.

The SEC, it is said, experienced several issues with the company’s data center, including issues with security, cooling, and power. According to court papers, SEC staff were prevented from viewing infrastructure at the data center which might have aroused suspicion that it did not have the required certification.

“As alleged in the indictment, Jain orchestrated a years-long scheme to defraud the SEC by falsely certifying that his company’s data center met the highest rating level, when the actual rating did not satisfy the SEC contract,” said principal deputy assistant attorney general Nicole M. Argentieri, head of the Justice Department’s Criminal Division.

“Jain allegedly sought to enrich himself and his company at the expense of the reliability, availability, and security of the SEC’s electronic data.”

Though the company involved is not named, Jain’s LinkedIn page lists him as founder of Maryland data center company AiNet. His profile says that the firm’s data centers are “Tier IV certified”. DCD has contacted AiNet to ask whether the company is involved in the court case.

According to DataCenterMap, Beltsville has three data centers operated by Coloco, Mosaic Data, and Verizon. AiNet operates a data center called "AiNet Coloco #8" in nearby Laurel which is described as being mission built for Verizon.

Jain has been charged with six counts of major fraud against the United States and one count of making false statements. If convicted, he faces a maximum penalty of 10 years in prison on each count of major fraud and a maximum penalty of five years in prison on the making false statements count.

In a statement to The Register, lawyers representing Jain said: “Deepak Jain and his company performed fully under the SEC contract. There is no evidence that any data was lost or compromised in any way. Mr Jain is an innocent man who looks forward to confronting these charges at trial.”