Fast-Growing Sunrise Software Company Buffeted by Lawsuits, Complaints

Atal Bansal, owner of the fast-growing Sunrise software development company Chetu, had some words of advice for Florida International University’s 2016 engineering graduates: “Go as fast as you can. Go as hard as you can.”

And Chetu – pronounced “chey-too” – has been going hard and fast for more than 20 years, reporting more than $67 million in revenues last year and marketing itself as a “global provider” offering “world-class services” to clients needing to develop or maintain apps or other software.

In that “life lessons” speech, Bansal said, his privately-held company “runs on streamlined processes that have been architected to minimize … efforts and enhance productivity, also known as lean or mean machine.”

But in court filings in Broward County and in federal court, some unhappy clients allege a different business model, one involving breaches of contract and schemes to defraud.

In a federal lawsuit filed against Chetu in August, Blue Chip Alliance alleges it paid $156,000 “for software that Chetu never delivered and for code that is entirely worthless.”

Blue Chip Alliance, the owner of 11 barber shops known as The Man Shop in Washington state and Montana, accuses Chetu in that lawsuit of “inducing customers into paying monthly development fees without either the competency or ability to deliver stable and non-defective software applications.”

But, as it has in other cases, Chetu offered in court filings a bold defense: no one ever promised the services Chetu provides would produce software that actually works.

While its website’s marketing video says Chetu promises to “guarantee the quality” of what the company does, its contract says something else.

“Blue Chip expressly agreed that Chetu’s services were provided ‘as is’ without warranty of any type and that Chetu was not obligated to deliver a final product free of defects,” Chetu responded in its motion to dismiss the lawsuit, which has not yet been ruled upon.

It's one of nearly 300 cases involving Chetu filed in Broward courts. In the only one we found that went to trial, a judge upheld the validity of the “as-is” clause and ordered the client to pay Chetu what it owed.

NBC 6 asked Chetu: How can it “guarantee the quality” of its work on its website, while arguing in court its contract does not guarantee that work will result in working software?

“We are a service provider and do not deliver products to clients,” replied Brian Poole, Chetu’s director of marketing.

Asked about allegations contained in lawsuits -- scheme to defraud; fraudulent billing; unjust enrichment; conversion; civil theft; marketing a client’s trade secrets and intellectual property to a competitor of Chetu’s client; providing products that are defective and worthless; incompetence; suppression of negative reviews; negligent misrepresentation; and violations of Florida’s unfair and deceptive trade practices act – the company provided this written statement:

“While we cannot comment on ongoing litigation matters, we can say that Chetu provides programmer staffing services for businesses around the world. Our provided programmers work under the vision and guidance of our customers, and all services are performed under mutually-agreed-upon and signed contracts amongst businesses. We've been around for over 22 years and faithfully service approximately 1,000 businesses per year. Although over 97% of our relationships are successful, it is unfortunate that a small portion of such relationships end up in court due to unpaid bills and clients not paying for services rendered. We maintain that any counterclaims made by former clients are without merit and will be settled in a court of law. As a healthy and accredited South Florida business that gives back and invests in the local community, we look forward to continuing to grow and add value to the region.”

Some of those involved in the lawsuits have another perspective.

“My experience with Chetu was awful,” said Kevin Tinkelman, owner of Kevins Worldwide, a Pennsylvania-based promotional products company sued by Chetu for failure to pay $7,800. “At the end of the relationship, I felt like they were scam artists that they were only in it to make a quick dollar and move on to the next.”

In response to the lawsuit, Tinkelman’s company countersued, alleging breach of contract for Chetu’s failure to provide competent consultants and deliver working software.

After paying Chetu about $26,000, Tinkelman told NBC 6 he stopped because “they never delivered anything they promised … they finished three of the projects that we were in the process of doing. None of them worked.”

Chetu didn’t address Tinkelman’s allegations specifically, but in its statement said any “counterclaims made by former clients are without merit.”

A similar story emerges from a lawsuit filed against Chetu by Java Printz LLC, an Ohio company that hired Chetu in June 2020 to make a video game connected to its football simulator.

“They estimated it would take a month to get it done and it took over eight months and it still wasn’t done,” said owner Cal Anderson. Java Printz’ lawsuit also alleges they failed to complete the project. “They were supposed to deliver a video game, a working video game but they delivered something that didn’t even work, for one, and it was basically useless.”

In its defense, Chetu once again raised the “as-is” clause of its contract, stating it does not guarantee any product will actually work.

In his suit, Anderson accused Chetu of “unjust enrichment” – keeping the $20,000 he paid without ever getting a working product, so he said he withheld the last $3,400 payment.

Chetu countersued and, after Java Printz stopped responding to legal filings, won a default judgment for $4,400 – the unpaid bill plus interest.

Other lawsuits include:

• A June 2022 action from a Maryland company, First Title and Escrow Inc., alleging Chetu breached its 2017 agreement by sharing its trade secrets and intellectual property by marketing First Title’s “proprietary computer software system” to a competitor during a Zoom call in 2021. Chetu denied the allegations and filed a motion to dismiss the case, which is set to be heard next month.
• A 2021 lawsuit Chetu filed against a California-based company, Advantage Property Management Services, that stopped paying Chetu was expanded in July to include a defamation action, after a company official posted messages online stating “Chetu is a scam. Don’t bother considering them … I have a $9,000 app that is worthless.” Chetu alleges in the case, which is pending, those public criticisms violate a non-disparagement clause in its contract.
• That clause, which Chetu has sought to enforce against other unsatisfied clients, also became part of a 2017 lawsuit the company filed against Nucleus Health. In a counterclaim, Nucleaus Health alleges it is “just one victim in what appears to be an orchestrated scheme to defraud unsuspecting customers.” Among the purported evidence of fraud, the suit states, is “the suppression of negative reviews … preventing clients, including Nucleus Health, from discovering the truth of what doing business with Chetu really looks like.” Trial in that case is set for next February.

The standard Chetu agreement states “neither party shall … make, post, publish or communicate to any person or entity or in any public forum any comments or statements (written or oral) that intentionally seek to denigrate or disparage, or are detrimental to, the reputation or stature of the other party to its businesses.”

Since it is a privately held company, there are few public records revealing the financial condition of Chetu.

In a January 2022 press release, it reported more than $67 million in 2021 revenue, nearly 24% growth, with a workforce of 2,200 “software experts,” the vast majority workers in India. It announced expansion at one of its three campuses in Noida, India, by 25,000 square feet to accommodate 550 additional developers.

In June 2021, a company headed by Chetu’s founder and chief executive, Bansal, paid $25 million for the five-story, 189,000 square foot office building that serves as Chetu’s headquarters, according to a company press release and public records. There’s no mortgage recorded on the property, indicating it was a cash purchase.

The company did not make Bansal, 48, available for an interview, during which he could have been asked about his successes.

But in his 2016 address to FIU engineering graduates, he did share how amazed he was at how far he had come.

“How do you take a kid who just got his graduate degree, add 20 years and end up owning a company with (then) 1,100 employees?” he said during the speech. “Honestly, I don’t know. It just happened. It is my belief it can happen to any one of us.”