An Indian-American CEO of two publicly-traded companies has been convicted on charges of paying kickbacks in return for purchases of his companies stock.

Shailesh Shah, 48, of California pleaded guilty before US District Judge Richard Stearns to two counts of mail fraud and two counts of wire fraud.

He will be sentenced in October and could face a sentence up to 20 years in prison followed by three years of supervised release and a fine of $250,000, Federal Bureau of Investigation said in a statement.

As president and CEO of two publicly-traded companies, Shah agreed to pay secret inducements to an investment fund representative in exchange for having the firm buy stock in his companies.

The kickbacks were concealed through the use of sham consulting agreements and other fraudulent documents.

Shah, however, did not know that the purported investment fund representative was an undercover FBI agent.

The plea follows a lengthy investigation focusing on preventing fraud in the microcap stock markets.

Microcap companies are small publicly-traded companies whose stock often trades at pennies per share.