Law enforcement authorities in Alabama have apprehended a young individual from India named Pathyam Patel for orchestrating a Ponzi scheme amounting to $400,000.
Patel, hailing from Gandhinagar, Gujarat, allegedly deceived investors by promising substantial returns on securities sales, although he never actually invested the funds as claimed. Instead, he reportedly diverted the money for personal expenditures without engaging in any legitimate securities transactions.
The Alabama Securities Commission (ASC) confirmed Patel’s arrest in Alabama on March 6, charging him with multiple violations of securities laws. According to reports from the Times of India, Patel stands accused of perpetrating at least nine instances of securities law infractions.
The ASC asserted that Patel solicited investments totaling over $400,000 from at least six investors, representing himself as affiliated with Infinity Wealth Management, an ostensibly registered investment advisory firm sanctioned by the US Securities and Exchange Commission.
Under the guise of this association, Patel purportedly assured investors of significant profits on their investments, assuring them against any potential loss of their principal amounts.
Furthermore, Patel allegedly demanded additional payments from investors to maintain their investments, all while failing to execute any legitimate investment activities as promised. Instead, he purportedly utilized the funds for gambling, personal expenses, and to repay other investors, thereby jeopardizing the safety of their principal investments.
In a revelation by authorities, Patel was found to be operating without registration with the ASC to conduct securities sales in Alabama. Additionally, the investment contracts sold by Patel were not registered with the ASC, and he lacked accreditation as an investment advisor or broker-dealer.
The Ponzi scheme, as described by Investor.gov, is an illicit investment scheme wherein fraudsters exploit funds from new investors to pay returns to existing investors, all while making deceptive promises of high returns with minimal risk. However, in reality, no actual investments are made, and funds are misappropriated for personal use by the orchestrators.
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