Aside from the infamous and original Charles Ponzi, probably the most famous fraudster in modern times is Bernie Madoff. Bernie Madoff is currently serving a 150 year sentence in federal prison for allegedly running the largest Ponzi scheme of all time.

However, Ponzi schemes in general are on the rise across the US, and manifest in a variety of ways. According to CNBC, the federal government arrested a college student in 2019 for running a Ponzi scheme out of a fraternity house.

What was the scheme?

Syed Arham Arbab is the name of the accused, and the federal government states that Arbab defrauded at least 8 of his classmates out of around $300,000. He was able to do this by claiming he was offering investments in a hedge fund.

At the time he was doing this, Arbab was living in the Phi Kappa Tau fraternity house at the University of Georgia. Thus, he was able to use his affiliation with the University of Georgia to bolster his standing and get the victims to invest.

Arbab called his “investment fund” Artis Proficio Capital, and told victims that returns would potentially reach over 50% of the investment. However, instead of investing the money that victims gave him, Arbab used the funds in a personal account to pay for strip clubs and bar-related expenses, Uber rides, and even a trip to Las Vegas.

What should I do if accused of running a Ponzi scheme?

The US Securities and Exchange Commission takes Ponzi schemes very seriously and will prosecute to the fullest extent of the law. If the federal government accuses you of running a Ponzi scheme, an aggressive, comprehensive defense is a must.

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