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Fraudsters Swindle Grizzlies' Owner Robert Pera for Millions

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Mr. Pera, you dropped something...

Nelson Chenault-USA TODAY Sports

Memphis Grizzlies' controlling owner Robert Pera's technology company was just hit hard…. Really hard… Pera’s company Ubiquiti Networks (San Jose California) reported a fraud, for a whopping $46 million.

The fraud was made public Thursday in a document filed by Ubiquiti with the U.S. Securities and Exchange Commission. The document states:

On June 5, 2015, the Company determined that it had been the victim of a criminal fraud. The incident involved employee impersonation and fraudulent requests from an outside entity targeting the Company’s finance department. This fraud resulted in transfers of funds aggregating $46.7 million held by a Company subsidiary incorporated in Hong Kong to other overseas accounts held by third parties. As soon as the Company became aware of this fraudulent activity it initiated contact with its Hong Kong subsidiary’s bank and promptly initiated legal proceedings in various foreign jurisdictions.

As a result of these efforts, the Company has recovered $8.1 million of the amounts transferred. Furthermore, an additional $6.8 million of the amounts transferred are currently subject to legal injunction and reasonably expected to be recovered by the Company in due course. The Company is continuing to pursue the recovery of the remaining $31.8 million and is cooperating with U.S. federal and numerous overseas law enforcement authorities who are actively pursuing a multi-agency criminal investigation. The Company may be limited in what information it can disclose due to the ongoing investigation.

The ultimate amount of the loss will depend, in part, on the Company’s success in recovering the funds. The Company may not be successful in obtaining any insurance coverage for this loss. The Company currently believes this is an isolated event and does not believe its technology systems have been compromised or that Company data has been exposed. While this matter will result in some additional near-term expenses, the Company does not expect this incident to have a material impact on its business or its ability to fund the anticipated working capital, capital expenditures and other liquidity requirements of its ongoing operations.

Ubiquiti, a 312-employee tech company, reported profits last year of $177 million. Ubiquiti is seeking the rest of its stolen cash — close to 32 million — but it may not be successful in retrieving any insurance coverage for this enormous loss.

Ubiquiti believes the incident was isolated, and that its technology systems haven't been compromised or exposed. On a lighter note, the company doesn't think the incident will have a material impact on the business.