Washington, March 16 (IANS) InfoGroup Inc's Indian-American founder Vinod Gupta, without admitting or denying wrongdoing, has agreed to pay $7.4 million in penalties and a ban from positions of authority in publicly traded companies in a case of alleged fraud.

In a settlement announced by the US Securities and Exchange Commission Monday, Vasant H. Raval, former director and audit committee chairman of the Omaha-based database compilation company, also agreed to a $50,000 penalty without admitting wrongdoing.

Also the subject of civil lawsuits filed by the SEC in the US District Court in Omaha were Rajnish K. Das and Stormy Dean, former chief financial officers of InfoGroup. They were accused of rubber-stamping illegal spending by Gupta.

The SEC alleged that while chairman and CEO of InfoGroup, Gupta fraudulently used corporate funds to pay almost $9.5 million in personal expenses to support his lavish lifestyle, according to Omaha World-Herald.

He also allegedly oversaw $9.3 million in undisclosed transactions with other companies in which he had a personal stake. The other three men helped hide those transactions, the lawsuits say.

'Gupta stole millions of dollars from Info shareholders by treating the company like it was his personal ATM,' said Robert Khuzami, Director of the SEC's Division of Enforcement.

'Other corporate officers also abused their positions of trust by looking the other way instead of standing up for investors and bringing the scheme to a halt.'

The SEC's complaints allege that from 2003 to 2007, Gupta improperly used corporate funds for more than $3 million worth of personal jet travel for himself, family, and friends to such destinations as South Africa, Italy, and Cancun.

He also used investor money to pay $2.8 million in expenses related to his yacht; $1.3 million in personal credit card expenses; and other costs associated with 28 club memberships, 20 automobiles, homes around the country, and three personal life insurance policies.

The SEC also alleges that Gupta failed to inform Info's other board members of the material fact that he had purchased shares of an Info acquisition target for his own ill-gotten financial benefit.