Vice President Of Investment Firm Arrested For Running Multimillion-Dollar Ponzi Scheme Targeting Afghanistan-Based Bank | USAO-SDNY


Audrey Strauss, Acting United States Attorney for the Southern District of New York, Special Inspector General John F. Sopko, of the Special Inspector General for Afghanistan Reconstruction (“SIGAR”), and Peter C. Fitzhugh, Special Agent-in-Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced today that NAIM ISMAIL, 60, a native of Afghanistan and a United States citizen, was arrested Wednesday evening in Los Angeles in connection with his participation in various investment schemes that defrauded victims of over $15 million.

The case has been assigned to U.S. District Judge Analisa Torres.  ISMAIL is expected to be presented today before United States Magistrate Judge Alicia G. Rosenberg of the Central District of California.

Acting Manhattan U.S. Attorney Audrey Strauss said:  “As alleged, Naim Ismail defrauded investors of more than $15 million through false promises about how investors’ money would be invested and what kind of return they could expect on their investment.  Now Ismail is in U.S. custody and facing serious federal charges.”

Special Inspector General John F. Sopko said:  “Afghanistan is a country struggling to create strong financial institutions and a viable economy after decades of war. The last thing it needs is to have one of its banks victimized in a Ponzi scheme. This scheme also targeted many U.S. victims.  I’m proud that SIGAR special agents and our partners at HSI, the FBI and the Southern District of New York are working hard to bring justice in this case.”

Special Agent-in-Charge Peter C. Fitzhugh said:  “As alleged in the indictment which was unsealed today, Ismail defrauded individual and corporate victims out of approximately $15 million dollars.  Investors were allegedly duped into investing large amounts of money for investment and real estate projects that did not exist.  Instead of investing the money and delivering returns, Ismail allegedly engaged in a Ponzi s scheme to fund his own lavish lifestyle.  The law enforcement partnerships under HSI New York’s El Dorado Task Force are integral in combatting complex financial frauds and it is with these continued partnerships that we are able to bring individuals like Ismail to justice, to hold him accountable for his criminal acts and seek restitution for the victims.”

According to the allegations in the Indictment unsealed today in Manhattan federal court,[1]and other publicly filed documents:

From February 2007 through July 2016, ISMAIL fraudulently induced individual and corporate victims – including the New York-based subsidiary of an Afghanistan-based bank – to loan large sums of money to entities operated by ISMAIL and others.  ISMAIL did so by claiming that these funds would be used in a particular investment strategy as well as several real estate development projects.  ISMAIL promised investors a generous fixed annual rate of return and promised to return the investors’ principal on a specified timeline.  In fact, ISMAIL and his companies did not invest these funds as promised, nor did ISMAIL repay many of his victims.  Instead, ISMAIL used investor funds to pay the so-called interest payments due to earlier investors in the scheme, as well as for his own personal expenses and investments. 

During the course of the fraudulent scheme, ISMAIL deprived the scheme’s victims of over $15 million. 

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ISMAIL, 60, most recently of Los Angeles, California, is charged with one count each of bank fraud, wire fraud affecting a financial institution, and conspiracy to commit bank and wire fraud.  Each charge carries a maximum sentence of 30 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Ms. Strauss praised the outstanding work of SIGAR and HSI on this investigation.  She also thanked the Federal Bureau of Investigation for their assistance in the investigation.

This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Kiersten A. Fletcher and Jonathan E. Rebold are in charge of the prosecution. 

 


[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.



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