The former chief executive of an Alaska company working on a massive fiber optic project in the Arctic is charged with committing fraud while she led the company.
Ex-Quintillion CEO Elizabeth Pierce is charged with one count of wire fraud for allegedly duping New York-based firms into investing more than $250 million in the project.
Quintillion, headquartered in Anchorage, and its subcontractors have laid hundreds of miles of fiber optic cable in the Arctic to connect northern Alaska communities to high-speed broadband. That system is part of a larger, international project that aims to eventually link North America, Asia and Europe.
Laying the cable, both undersea and on land, has taken a lot of money. And according to criminal charges unsealed Thursday, some of those investments were obtained through deception.
That alleged trickery is at the heart of the criminal charges filed against Pierce, 54 and an Anchorage resident.
A spokesperson for the U.S. Attorney in the Southern District of New York, where the charges were filed, refused to comment on the case. But according to a written statement from the U.S. Attorney, one of the companies buying bandwidth on the system tipped off the FBI, leading to an investigation.
Kristina Woolston, Quintillion’s vice president of external relations, said the company also discovered the alleged fraud in 2017 and reported it to federal authorities.
“Quintillion and its investors and board have been cooperating fully with the Department of Justice in its ongoing investigation since that time,” Woolston said.
According to the charges, Pierce forged parts of contracts with telecommunications companies buying future access to the bandwidth. The charges say the forgery led the investors to believe that their investments would generate hundreds of millions of dollars when, in fact, the system was worth far less.
The charges say Pierce was under pressure to make Quintillion appear more valuable to keep investments flowing in, at least at one point so the company could finish laying undersea cable before the onset of winter in the Arctic.
Pierce was CEO of Quintillion from when it formed in 2012 until resigning in August of 2017. That was for, “personal reasons,” according to a company press release at the time. The alleged fraud occurred from May 2015 to July 2017.
Woolston would not say whether Pierce’s resignation was related to the allegations of fraud. And Woolston brushed away questions about the possibility of negative impacts to future investments in Quintillion.
“We are extremely disappointed in the situation, as you can imagine, but this remains a transformative project for Alaska, and our investors remain committed to the project,” Woolston said.
While the allegations seem to indicate Quintillion benefited from the millions of dollars in investments — and there is no mention of Pierce herself benefiting financially — the company is not named in the charges. Quintillion is referred to in the charges only using the general term “the Fiber Optic Company.”
The charges also do not name any of the investors, nor the five telecommunications companies that were alleged victims.
According to a press release from federal prosecutors, Pierce surrendered to FBI agents and was arrested in New York after the charges were unsealed Thursday.