Indian National arrested in Alabama for $400,000 ponzi scheme

livemint.com:

Alabama have indicted a 23-year-old Indian national, Pathyam Patel, on charges of orchestrating a $400,000 Ponzi scheme through the illegal sale of unregistered securities. Patel, also known as Pat Patel, faces nine counts of securities law violations in the state, according to a report by Times of India. According to the Alabama Securities Commission (ASC), Patel allegedly sold over $400,000 worth of investment contracts to at least six investors while falsely claiming to be associated with Infinity Wealth Management, an investment advisory firm purportedly registered with the U.S.

Securities and Exchange Commission, as per the report. Patel is accused of misrepresenting his ability to generate substantial profits for investors by investing their funds, guaranteeing that they would not lose their principal amount. However, instead of investing the money as promised, authorities allege that Patel used the funds for personal expenses, gambling on sporting events, and paying other investors in a classic Ponzi scheme fashion.

"Patel did not invest the funds as communicated to the investors. Instead, he used them for gambling on sporting events, personal expenses, and paying other investors. Patel had no ability to guarantee that the investors would not lose their principal (amount)," stated the ASC, as quoted by TOI.

At the time of the alleged offences, Patel was neither registered with the ASC to sell securities in Alabama, nor were the investment contracts he sold registered with the commission. Additionally, Infinity Wealth Management was not a registered investment advisor or broker-dealer, further compounding the alleged violations, as per TOI. Patel, a native of Gandhinagar, India, was arrested on March 6 following an