By Jonathan Stempel

NEW YORK (Reuters) - U.S. prosecutors on Thursday announced criminal fraud charges against two former American Realty Capital Properties Inc executives stemming from a 2014 accounting scandal that wiped out roughly $4 billion of the real estate investment trust's market value.

Former Chief Financial Officer Brian Block, 44, was charged with six criminal counts, including securities fraud, conspiracy and making false statements, according to U.S. Attorney Preet Bharara in Manhattan.

Lisa McAlister, 52, a former chief accounting officer, pleaded guilty on June 29 to four counts, including securities fraud and conspiracy, and is cooperating, Bharara said.

The U.S. Securities and Exchange Commission filed related civil charges against both defendants, seeking fines and officer and director bans.

Block was arrested on Thursday at his home in Hatfield, Pennsylvania. He was released on $1 million bond after appearing in the federal court in Philadelphia, prosecutors said.

"These charges against Brian Block are entirely unwarranted," his lawyer Reid Weingarten said in a statement. "He is completely innocent and will be exonerated in court."

McAlister's lawyer, Dwight Bostwick, declined to comment. McAlister lives in Arlington, Massachusetts.

Now based in Phoenix and known as Vereit Inc <VER.N>, American Realty was part of a commercial real estate empire built by investor Nicholas Schorsch. Neither he nor Vereit was accused of wrongdoing. A Vereit spokesman declined to comment.

The defendants were accused of scheming to manipulate American Realty's adjusted funds from operations (AFFO), a key financial metric, in the first half of 2014.

Authorities said Block concealed an AFFO calculation error he had been warned about internally, and with McAlister in his office plugged fake numbers into a spreadsheet later incorporated into results reported to the public and the SEC.

The bogus data made it appear that American Realty met Wall Street forecasts, when it had not, authorities said.

"Market investors are entitled to be told the truth from publicly traded companies," Bharara said in a statement. "When investors are lied to about material information, as is alleged to have happened here, the perpetrators need to be investigated and prosecuted."

American Realty shares plunged as much as 37 percent on Oct. 29, 2014 after the REIT said employees "intentionally" concealed accounting errors that caused the AFFO overstatement. It also said Block and McAlister had resigned the previous day.

The REIT later restated its results.

Another Schorsch business, brokerage RCS Capital, filed for bankruptcy seven months ago as part of a plan to give lenders control of its profitable Cetera investment advisory affiliate.

The cases are U.S. v Block, U.S. District Court, Southern District of New York, No. 16-cr-00595; and SEC v Block et al in the same court, No. 16-07003.

(Reporting by Jonathan Stempel in New York; Additional reporting by Suzanne Barlyn and Nate Raymond; editing by Dan Grebler and Richard Chang)