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NEW YORK (Reuters) - U.S. authorities on Thursday unveiled criminal charges against two former American Realty Capital Properties Inc finance officers in connection with a 2014 accounting scandal that wiped out roughly $4 billion of market value.
Brian Block, 44, the real estate investment trust's former chief financial officer, was charged with six counts including securities fraud, conspiracy and making false statements, according to U.S. Attorney Preet Bharara in Manhattan.
Former chief accounting officer Lisa McAlister, 52, pleaded guilty on June 29 to four counts, including securities fraud and conspiracy, and was cooperating with prosecutors, Bharara said.
The U.S. Securities and Exchange Commission filed related civil charges against both defendants. Block was arrested on Thursday at his home in Hatfield, Pennsylvania, while McAlister lives in Arlington, Massachusetts.
Now based in Phoenix and known as Vereit Inc (N:VER), American Realty Capital went public in 2011, and was part of a commercial real estate empire built by the investor Nicholas Schorsch. Neither he nor Vereit was accused of wrongdoing.
Authorities said Block hatched a plan to conceal an AFFO calculation error to meet financial targets, and with McAlister in his office plugged fake numbers into a spreadsheet that was later incorporated into results reported to the public and the SEC.
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