Tustin Man Allegedly Behind $10 Million Google and Morgan Stanley Ponzi Scheme in Court Today
His alleged crime: operating an investment scam that defrauded at least 20 people out of $10 million by forging statements on Morgan Stanley letterhead and falsely claiming he'd invested clients' money in such companies as Google Inc. when he did not.
Portions of today's joint annoncement by Steven M. Martinez, assistant director in charge of the FBI in Los Angeles, and George S. Cardona, acting United States Attorney for the Central District of Los Angeles, follow after the jump . . .
Chaudhary, who was doing business as Transpacific Intertrade Inc, was charged in a criminal complaint filed on December 7, 2009 in U.S. District Court in Santa Ana with mail fraud, a violation of Title 18 U.S.C., Section 1341. According to the complaint, Chaudhary defrauded victims by promising to invest their money in initial public offerings and secondary share offerings by companies such as Google, Inc., when in fact, no such investments were made. The complaint identifies four victims that are believed to have provided over $3 million to Chaudhary.
According to the complaint, Chaudhary allegedly mailed forged statements on Morgan Stanley letterhead to at least one victim from whom Chaudhary obtained $1 million. The forged statement indicated that stock purchases had been made through a Morgan Stanley account, when in fact, no such account existed. Chaudhary allegedly fabricated the identity of a financial advisor at Morgan Stanley to legitimize the purported investment. According to the complaint, investigators believe that the bogus statement is consistent with the "lulling" activity that individuals engaged in fraud use in order to placate victims and to make victims believe their investments are safe.
The complaint alleges that Chaudhary told at least one victim that his investment of $995,000 was gone and that he had also defrauded at least 20 people out of a total of $10 million or more. Further, Chaudhary recently admitted to another victim that he was running a Ponzi scheme and that he had not invested any of the victims' money.
Chaudhary was brought to Santa Ana for today's hearing by U.S. marshals.