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OCEAN COUNTY, NJ -- Elaut USA Inc. is seeking to recover more than $1.6 million that it alleges was stolen by two former top executives. The lawsuit, filed in the Superior Court of New Jersey, charges that Jack Guarnieri began redirecting cash payments, which should have gone to an Elaut subsidiary, into various accounts Guarnieri personally controlled after he took the helm at the Lakewood, NJ, amusement company in October 2008.

Elaut USA is a subsidiary of Belgium's Elaut nv/sa, a 60-year-old amusement machine manufacturer, which began its American expansion in 2008 with the acquisition of Monduce Inc., an operating company specializing in arcade concessions at amusement parks. That same year, Elaut appointed Guarnieri to manage its U.S. interests as president and chief executive. Guarnieri also continued to run his own Pinballsales.com business, one of the largest resellers of classic coin machines.

Guarnieri resigned his post at Elaut USA in 2012, after announcing the formation of Jersey Jack Pinball, which is also named as a defendant in the lawsuit. Another codefendant is Michael Carle who, according to Elaut, was appointed by Guarnieri to replace the company's longtime chief financial officer. As CFO, Carle "hid Guarnieri's audacious scheme with several accounting tricks," the lawsuit claims. Other charges include false write-downs of inventory and check receivables, along with intra-company loans to a subsidiary unable to repay them because money had been funneled to Guarnieri. Elaut alleges that some monies were fraudulently transferred to Guarnieri's pinball startup.

While the lawsuit was filed in December, news of the action was not publicized until Replay Magazine published a report about it on Feb. 2.

Guarnieri issued the following statement: "To all in the industry who know me, I want to be the first to tell you about some news you may be hearing, from other sources, about a civil complaint filed against me personally and against Jersey Jack Pinball Inc. by Elaut USA Inc. As you may know, I left the employ of Elaut USA Inc. more than three years ago. The complaint alleges that I while employed at Elaut USA Inc., took money for myself and for Jersey Jack Pinball Inc. to which I was not entitled. I have categorically denied these allegations in response to this complaint, and I categorically deny them now. The complaint is utterly without merit and a frivolous waste of judicial resources. I intend to vigorously defend this matter and anticipate that when the truth emerges, I will be fully vindicated as to each and every allegation."

Elaut officials said they couldn't comment on pending litigation.