Henn Tan, the founder of the company that invented the thumb drive, was on Tuesday sentenced to one year and four months in jail for committing accounting fraud.

The 66-year-old former chief executive of mainboard-listed Trek 2000 International had pleaded guilty in August to five charges of engaging in conspiracies to falsify accounts, forge documents and cheat external auditors.

Another four similar charges were taken into consideration for his sentencing.
The court heard that Tan, who is Singaporean, had conspired between 2006 and 2011 with the chief financial officer Gurcharan Singh to falsify Trek 2000’s financial statements pertaining to licensing income.

Their crimes were kept under wraps for years until Trek’s 2000’s auditors Ernst & Young (EY) discovered that Tan and his co-accused had cooked the books for the financial year 2015.

Tan had realized at the time that the company’s performance for the financial year 2015 would be dismal and conspired with a few senior officers to inflate revenue and pre-tax operating profit by plucking a US$3.2 million sale from thin air – accompanied with false supporting documents.

When confronted about the transaction, Tan and his co-accused tried to deceive EY that the sale was genuine, and the financial statements had been drawn up properly.

EY, however, discovered that the bank documents it had received were forged and began to conduct further audit procedures, including forensic imaging of the laptops and computers of Singh, then president of regional sales Foo Kok Wah, and former executive director Poo Teng Pin.