Former UGA student pleads guilty to million dollar Ponzi scheme

Crime
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MACON, Ga. (WRBL) – A former University of Georgia student plead guilty to Securities Fraud after operating a Ponzi scheme that collected close to $1 million from 117 investors.

Syed Arham Arbab, 22, of Augusta, plead guilty to one-count of Securities Fraud, admitting he spent investor funds on personal expenses such as clothes, shoes, retail purchases, fine dining, alcohol, adult entertainment, gambling, and interstate travel, Department of Justice officials say.

“The defendant engaged in a pattern of deceit to gain the trust of unwitting investors who gave him their hard-earned money for what they believed was a sound investment. Instead of investing the victims’ money, the defendant funded a lavish lifestyle,” said Charlie Peeler, the U.S. Attorney for the Middle District of Georgia.

From May 2018 through May 2019, Arbab sought out investments from a variety of sources, including his fellow students. For his crimes, Arbab faces up to five years in prison, a $10,000 fine, three years supervised release, and is subject to any restitution ordered by the court, the DOJ said.

Arbab’s sentencing is scheduled for Jan. 8, 2020.

Reportedly, Arbab operated the scheme out of his fraternity house bedroom, and used a number of different strategies to persuade his victims to invest.

“Mr. Arbab made a number of misrepresentations in order to persuade victims to invest with him. The defendant also fabricated account statements, misrepresented the fund’s returns, the number of investors, the total funds invested and the nature of the investment plays being made. Victims invested approximately $1 million with Mr. Arbab in the course of his scheme, with Mr. Arbab falsely promising rates of returns as high as 22% or 56%, when his overall returns were nowhere near these amounts.  Mr. Arbab offered some investors a seemingly risk-free “guarantee” on the first $15,000 invested, and the majority of investors, especially those who were students or younger professionals,” according to the DOJ.

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