MOD Systems continues to undergo tumultuous internal changes following fraud and embezzlement allegations brought against the company's top brass.
Sources tell TechFlash that as many as four workers were recently relieved of their duties at the heavily-funded Seattle company, including director of marketing Adrienne Lenhart and director of operations Douglas Lower. That follows our report earlier this month that Chief Executive Mark Phillips and Chief Operating Officer Kenneth Gordon had been placed on leave.
It was unclear whether Phillips and Gordon would ever be reinstated, and our sources didn't know the official status of the two executives. One source described it as an "indefinite leave."
Reached on his cell phone, acting CEO Anthony Bay declined to comment. Lenhart, who had previously served as spokeswoman for the company, could not be reached.
In February, Seattle angel investor Bob Arnold sued Phillips, Bay and Gordon for breaching their fiduciary duties at the company. Filed in King County Superior Court, Arnold's suit alleged that Phillips "deliberately engaged in a massive fraud" against the company that included inappropriate travel and consulting agreements.
Lower and Lenhart are not named as defendants in the lawsuit.
Last September, the company landed one of the largest venture deals in the state when it attracted $35 million from Toshiba and NCR. MOD is the maker of a digital media kiosk technology that allows retailers to distribute music, movies, games and other entertainment products directly to consumers.
Since the allegations were reported by TechFlash, MOD has kept a relatively low profile with few comments in the press.
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