Former UGA Student Pleads Guilty To Running Million-Dollar Ponzi Scheme From Frat House
A former University of Georgia student has pleaded guilty to securities fraud for running a $1 million ponzi scheme out of his fraternity house while a student, according to Bloomberg Law.
Syed Arham Arbab pleaded guilty to securities fraud in the U.S. District Court for the Middle District of Georgia, according to the Department of Justice. He also faces a SEC suit, separate from the DOJ case against him, in the same court.
As part of his plea, Arbab admitted to falsely promising investors, including UGA students, returns as high as 56%. He told potential investors that a UGA alumnus who went on to play in the NFL had invested with him in order to convince football fans to trust him with their money.
He also falsified investment returns, according to the complaint, after allegedly losing more than $300,000 trading.
During the course of the alleged scheme, Arbab allegedly lost more than $300,000 in trading, leaving just $350 when his brokerage account was closed, the complaint said. Arbab also allegedly tricked clients into sending money to earlier investors through digital payments services such as Zelle and Venmo, telling the client the money was being sent to other partners or employees.
Arbab also claimed to be an MBA candidate, but had instead been rejected by UGA’s graduate program. He admitted to using investor funds to cover alcohol purchases, gambling during three trips to Las Vegas and “adult entertainment”.
He will be sentenced in January 2020.
Sun, 10/13/2019 – 18:55