Millions in Fraud: FBI Nabs Indian American Manager

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New York – The New York Field Office of the Federal Bureau of Investigation (FBI) cracked a case involving three individuals involved in a case to commit securities fraud and wire fraud according to official documents from the US Department of Justice.   

Announcing the arrest of three accused Anilesh Ahuja (Neil), Amin Majidi and Jeremy Shor; Audrey Strauss, the Attorney for the United States said in a statement, “To compete with other peer funds, Neil Ahuja, founder of an investment firm, allegedly manipulated the firm’s performance numbers, using fraudulently inflated values for the firm’s securities holdings and lying to investors about how the firm would mark its positions.”

Noting that investors rely on a hedge fund’s performance numbers when deciding whom to trust with their capital. she said, “By allegedly cooking the books, Ahuja and his co-defendants made the fund appear more attractive to would-be investors and dissuaded current investors from withdrawing their investments.”

Ahuja is the founder, chief executive officer, and chief investment officer of a New York-based investment firm that managed hedge funds focused on structured credit products and Majidi is a former partner and portfolio manager at the firm, while Shor is a former trader at the firm.

Commenting on the modus operandi of the trio, FBI Assistant Director William F. Sweeney Jr. said: “The defendants’ alleged practice of intentionally misleading investors and mismarking securities held in the funds they managed allowed them to charge higher fees and hold captive money that would have likely been withdrawn had their clients been aware of the hedge fund’s actual value. Their initial success was based on self-imposed target returns, supported by reverse engineering tactics, but in the end, they missed their mark.”    

The trio Ahuja, Majidi and Shor are charged with participating in a scheme, from in or about 2014 through in or about 2016, to commit securities fraud and wire fraud relating to the mismarking of certain securities held in hedge funds that the firm managed, thus fraudulently inflating the Net Asset Value (NAV) of those funds as reported to investors and potential investors, according to court documents.

The documents reveal that “At its peak, the mismarking across all funds managed by the firm exceeded $200 million.”

As alleged in the Indictment, the mismarking scheme evolved as a result of demands by Ahuja and Majidi that the firm maintain its track record of success and keep pace with the performance of peer funds, regardless of market conditions or the actual performance of the funds.

In a separate action, the Securities and Exchange Commission (SEC) filed civil charges against Ahuja, Majidi and Shor.

Earlier, Ahuja (49) of New York (NY) was arrested in New York while Majidi (52) at his home in Armonk, (NY) and Shor (46) from New York self-surrendered to the authorities in New York (NY). The accused face years in prison and millions in fines if convicted.

Dole, Dinucci Plead Guilty and Cooperate

Moreover, US Attorney Strauss announced the unsealing of charges against Ashish Dole, a former chief risk officer and trader at the firm, and Frank Dinucci, Jr., a former salesman at a broker-dealer, disclosing that both Dole and Dinucci pled guilty and are cooperating with the Government.

Strauss promised, “We will continue to work with our law enforcement and regulatory partners to ensure that investors are provided accurate information when making important investment decisions.”

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