Ibrahim “Albert” Fouerti, 46, and Elie Fouerti, 47, brothers from Brooklyn, New York, built the online appliance retailer Appliances Connection and sold it in June 2021 to Polished.com Inc., the New York Stock Exchange-listed company formerly known as 1847 Goedeker. As part of that deal, Albert became CEO of Polished.com in September 2021 and a director, while Elie became chief operating officer in January 2022. According to the SEC, between June 2021 and February 2022 the brothers collectively charged at least $290,000 in personal and unauthorized expenses, including donations to religious organizations, tuition for their children, and unauthorized travel, on credit cards that were held in their own names but paid for by Polished.com. When the company’s auditor sent them related-party questionnaires in early 2022 as part of the audit of the 2021 annual report, the brothers disclosed certain lease arrangements but omitted the credit card charges, rendering their responses materially false and misleading. On August 21, 2026, the SEC issued a settled order against both men.
It is important to be precise about what the SEC charged. The Commission’s order charges the Fouerti brothers narrowly, with violating Rule 13b2-2(a) of the Exchange Act, which prohibits officers and directors from making materially false or misleading statements to accountants in connection with an audit. The order is about the concealment from the auditor, not a separate charge for the underlying spending itself. Without admitting the findings, Albert Fouerti agreed to pay a civil penalty of $75,000 and Elie Fouerti agreed to pay $50,000. The broader consequences described below, the internal investigation’s findings, the multimillion-dollar repayment, the auditor’s resignation, and the company’s collapse, come from Polished.com’s own public filings and news coverage rather than from the four corners of the SEC’s order.
Company-Paid Cards Used for Religious Donations, Children’s Tuition, and Travel
The mechanism of the improper spending grew out of the acquisition itself. Before Appliances Connection was sold to Polished.com, the brothers had used certain credit cards, opened in their names, for the general business expenses of their privately owned retailer. After the June 2021 acquisition, Polished.com continued to charge millions of dollars of legitimate general business expenses, such as inventory purchases, to those same cards on a monthly basis, and the company paid the bills. That arrangement created the opening. From June 2021 through February 2022, according to the SEC, the brothers charged at least $290,000 in personal and unauthorized expenses to the company-paid cards alongside the legitimate business charges. The personal items the SEC identified included donations to religious organizations, tuition expenses for their children, and unauthorized travel. Because the company was paying the card bills, these personal charges were effectively funded by the public company and its shareholders.
The concealment came when the auditor tried to test exactly this kind of risk. In February 2022, as part of its audit of Polished.com’s 2021 financial statements, the auditor sent the brothers related-party questionnaires asking whether they or any related parties had any direct or indirect interest in transactions with the company, or were indebted to or had receivables from the company. In March 2022, the brothers submitted responses that disclosed certain leases between Polished.com and entities they controlled but said nothing about the credit card charges. That omission is the violation. The information mattered to the auditor because, as the SEC put it, it would have affected the audit team’s testing procedures and its assessment of management integrity, the auditor’s judgment about whether the people running the company could be trusted.
An Internal Investigation, a $3.7M Repayment, and an Auditor Who Resigned
The credit card charges did not stay hidden. In June 2022, the audit committee of Polished.com’s board launched an internal investigation. In October 2022, before that investigation concluded, both brothers resigned their officer roles, along with the company’s chief financial officer. In December 2022, Polished.com disclosed in a securities filing that the investigation had concluded, among other things, that Albert Fouerti had charged the company for expenses unrelated to its operations. According to news coverage of the investigation, the improper charges attributed to Albert were reported at around $800,000, a larger figure than the $290,000 the SEC order specifically attributes to the two brothers’ undisclosed personal charges during the June 2021 to February 2022 window. The company also disclosed that Albert had entered into a settlement and cooperation agreement under which he agreed to pay $3,700,000 to Polished.com to resolve claims relating to the expenses and the costs of the investigation.
The auditor’s response was severe. The same December 2022 filing disclosed that the auditor had resigned, effective December 20, 2022, because the internal investigation had identified facts that might prevent the auditor from relying on the representations of former management. The auditor withdrew its audit opinion for the 2021 annual report and declined to be associated with several quarterly financial statements. The SEC’s order states plainly that the concerns raised by the credit card charges were one of the primary factors that caused the auditor to resign. An auditor resigning and withdrawing its opinion is one of the most serious events that can befall a public company, because it signals to the market that the company’s audited financials can no longer be relied upon. Polished.com later engaged a new auditor and, in July 2023, filed a comprehensive annual report that restated its 2021 results, though the SEC noted the credit card charges themselves did not factor into the restatement.
From a $224M Acquisition to Chapter 7 Bankruptcy
The trajectory of Polished.com is the backdrop that makes the case consequential. The company traced its roots to Goedeker’s, a St. Louis appliance retailer founded in 1951 that was acquired by an investment firm in 2019, taken public, and then used to acquire the Fouertis’ Appliances Connection in June 2021 for approximately $224.7 million, after which the combined company was renamed Polished.com and moved to Brooklyn. Less than three years later, on March 7, 2024, Polished.com and its subsidiaries filed for Chapter 7 bankruptcy, the liquidation chapter, in the District of Delaware, after suspending operations when it could not raise additional financing. The company’s stock, once listed on the New York Stock Exchange, now trades on the OTC Expert Market. A separate shareholder class action naming Polished.com, its former CEO Douglas Moore, Albert Fouerti, and the former CFO has proceeded in federal court in the Eastern District of New York. The SEC’s settled order against the two brothers, with its $75,000 and $50,000 penalties, is a narrow resolution of one specific piece of a much larger corporate collapse. The related-party disclosure rules the brothers violated exist precisely so that auditors and investors can see when the people running a company are also on the other side of its money.
Conclusion
Albert and Elie Fouerti sold their appliance business to a public company, took the top two operating roles, and then charged at least $290,000 in personal costs, religious donations, their children’s tuition, and travel, to credit cards the company paid. When the auditor asked them directly, in writing, whether they had undisclosed dealings with the company, they disclosed some leases and left out the charges. That omission is what the SEC charged, and both brothers settled, Albert for $75,000 and Elie for $50,000. The wider story around that narrow charge is a company that investigated its own CEO, secured a $3.7 million repayment agreement, lost its auditor, restated its financials, and filed for Chapter 7 bankruptcy. The questionnaire asked a simple question. The answer left out the part that mattered most.
