The chief executive officer of a Charleston technology firm who was indicted on fraud charges earlier this year has filed for personal bankruptcy as he faces mounting debts.
Amir Golestan, CEO of Micfo LLC, reported owing between $10 million and $50 million to less than 100 creditors, according to a filing last week. He estimated his assets at less than $10 million.
The bulk of the debts are owed to banks. JPMorgan Chase & Co., which notified Golestan in the spring that it would close his personal and business accounts, is owed $3 million. Columbia-based South State Bank is owed about $1 million.
He also listed debts to various local businesses, including Roper St. Francis, a Mount Pleasant construction company, a gardening company on Wadmalaw Island and a North Charleston security services firm.
Golestan and his cloud-hosting business pleaded not guilty to federal wire-fraud charges, which were announced in the spring. Prosecutors allege they created a network of shell companies registered under fictitious executives' names in order to obtain internet protocol addresses, which are the unique and scarce numerical combinations that smartphones and other devices need to connect to the internet.
In an interview Friday, Golestan said bankruptcy was his last resort. Before the indictment, Golestan said Micfo was pulling in $700,000 a month in revenue. Ninety percent of that has dried up, he said.
He painted his financial troubles as beginning with legal fees and court-ordered payments stemming from his divorce case, which was filed last December. He said the months following have been like watching dominoes fall, and he is facing increasing financial and legal difficulty.
He owes various law offices at least $630,000, according to his bankruptcy filing. And he lists a balance of $42,000 in employment withholding taxes due to the Internal Revenue Service. The S.C. Department of Revenue is listed as a creditor as well, but the size of its debt was not specified.
Golestan said his chief goal has been keeping the doors open at Micfo, which he said is his sole source of income. He said he made judgment calls about what debts to pay first with the business and his family in mind.
"Supporting my family was my main priority," he said.
Golestan and two employees continue to work at the East Bay Street offices and the firm still has clients. Though most of his customers fled after the indictment, Micfo is bringing in revenue. The CEO said he is focusing on cutting back the costs of operating the business in order to keep it afloat.
Golestan requested the U.S. Bankruptcy Court allow him to hire a law firm to help sort out his finances, which the judge allowed. A hearing of his creditors is scheduled for Dec. 2, and trial date in the criminal fraud case has been moved to early next year. Golestan has maintained his innocence. In an October argument, Golestan's attorney wrote it is impossible to own the IP addresses he is accused of stealing. The U.S. Attorney's Office responded that argument “strains reason.”
Meanwhile, lawsuits have piled up in local and federal courts. One filed in New Jersey by Hewlett-Packard's financial services company Oct. 21, for instance, states Micfo failed to make payments on roughly 45 of the servers it leases from HP to run its cloud-hosting business. HP sent Micfo a letter demanding $345,485 in February.
Golestan filed for bankruptcy protection a few days after a judge issued a summons in the case with HP.