The FBI arrested former Entellium CEO Paul Johnston and CFO Parrish Jones Tuesday night and on Wednesday the pair was hauled into district court in Seattle to face criminal charges of wire fraud.

Seems they kept two sets of books: one that they allegedly used to con about $50 million from investors like Ignition Partners and Sigma Partners and the real ones that weren't anywhere near as bonnie.

According to the FBI and the U.S. Attorney's Office, a set of books marked "board books" was discovered a couple of weeks ago by the company's HR VP when she was cleaning out the desk of the start-up's former VP of sales. They wound up with the company's controller, then the board and its legal counsel, who blew the whistle and called the cops.

The fake books show that the board was told the company had revenues of $4 million in 2006 when they were in fact $582,789; that the revenues last year were $6.7 million when they were really $1.4 million; and that they were $5.2 million this year when they were only $1.7 million, according to the U.S Attorney.

On the basis of the "board books" Ignition poured $19.7 million into the web-based CRM start-up, wiring it $2 million as recently as April. Ignition had two board seats and told the FBI it "would not have made such a significant investment had they been aware of the accurate revenue figures."

The company also had private investors.

Johnston, 40, and Jones, 39, stepped down last week after the jig was up and Johnston sent an e-mail to board members from Ignition and Sigma confessing to making a "grave mistake in misrepresenting our revenue reporting to the board. Looking back at the time we thought we would be able to right the wrong and correct our representation, but we have not been able to do this."

The company, which was incorporated in Seattle in 2004, then proceeded to lay off two-thirds of its Seattle staff of 60. It employed another 75 in Malaysia.

The U.S. Attorney is trying to track down the money.

According to the Seattle Times Johnston drove a white Maserati Quattroporte that the paper said sells for $120,000.

Johnston and Jones are looking at 20 years in prison and fines of $250,000. Johnston, a UK subject and so a flight risk, is in custody pending a hearing.