Diamond Bar Man Arrested on Federal Charges of Running Ponzi Scheme That Raised $49 Million from Investors in Day Trading Scheme
|U.S. Attorney’s Office October 30, 2012|
LOS ANGELES—Federal agents this morning arrested a Diamond Bar man on federal wire fraud charges that allege he ran an investment scheme that raised $49 million from investors who suffered losses of approximately $32 million after he lost millions on bad trades and spent millions on Ponzi payments and personal expenses such as gambling.
Syed Qaisar Madad, 65, the CEO and co-owner of Technology for Telecommunication and Multimedia Inc. (TTM), was arrested at his home without incident by special agents with the FBI and IRS-Criminal Investigation. Madad is expected to be arraigned on a 16-count indictment this afternoon in United States District Court in Los Angeles.
Madad, a native of Pakistan who is now a Canadian citizen residing in the United States as a lawful permanent alien, allegedly bilked investors with false promises that his day trading method would make consistent, substantial profits. The indictment also alleges that Madad falsely told victims that their money was safe and would be returned to them upon request.
However, as the indictment alleges, Madad was actually running a Ponzi scheme in which he used funds from some investors to repay others. While Madad promised that he would not take any fees or compensation for managing the invested funds, Madad allegedly withdrew investors’ money in cash and used millions of investor funds to pay his own personal expenses and expenses of his wife’s business.
The indictment further charges that Madad provided the FBI with fraudulent documents that he claimed were brokerage statements for UBS accounts in Switzerland. The indictment also includes tax fraud charges based on Madad’s failure to report all the money and benefits he received from TTM in 2007, 2008, and 2009.
Madad’s scheme came to light when he was sued by one of his investors. In lawsuits filed by the government seeking forfeiture of Madad’s residence and other property, authorities allege that, even after the victim’s lawsuit was filed, Madad continued to solicit investors to put money into his day trading scheme.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.
The indictment alleges 12 counts of wire fraud, one count of making a false statement to a government agency and three counts of subscribing to a false tax return. If Madad were to be convicted of all 16 counts in the indictment, he would face a statutory maximum sentence of 260 years in federal prison.
The case against Madad is the result of an ongoing investigation by the Federal Bureau of Investigation and IRS-Criminal Investigation.