A 44-year-old Greenwich man - on the run since last April - has been indicted in in connection with embezzling $54 million from the private equity firm for which he worked.
Iftikar Ali Ahmed, aka Ifty, 44, was indicted Wednesday in U.S. District Court in Boston on four counts of wire fraud and three counts of making false statements on income tax returns. Ahmed is currently a fugitive from justice. He was charged in a separate scheme in April 2015, and fled the country while on pre-trial release.
The indictment alleges that between 2004 and April 2015, Ahmed embezzled more than $54 million from the private equity firm for which he worked as a general partner and fund manager.
The indictment further alleges that Ahmed used the proceeds of his fraud to purchase a $9.6 million residence in Greenwich and a luxury condominium in New York for approximately $8.6 million.
‘An elaborate scheme’
According to U.S. Attorney Carmen M. Ortiz said, “Ahmed embezzled the money through an elaborate scheme to defraud in which he submitted false invoices, substantially overstated the prices of international business deals he orchestrated on behalf of his employer, and by setting up fraudulent bank accounts in the name of the private equity firm for which he worked and the companies in which his employer invested.”
On one occasion in November 2014, it is alleged that Ahmed recommended to his private equity firm that it invest $20 million in an international company and justified the price by submitting fraudulent financial documents. At the same time, Ahmed informed the international company that his employer had agreed to purchase shares for $2 million.
The indictment alleges that Ahmed then directed the private equity firm to wire $2 million to another company and the remaining $18 million to an account that Ahmed falsely claimed was the company’s account, but actually belonged to Ahmed.
On Jan. 12, 2015, Ahmed transferred the $18 million in fraud proceeds to his spouse and a portion of these funds was used to purchase a luxury condominium in New York City, according to the indictment.
According to The Hindu, Ahmed and another Indian-origin entrepreneur were charged in April 2015 for insider trading for making over a million dollars in illegal profits through the proposed acquisition of Cooper Tire and Rubber by India’s Apollo Tyres. Amit Kanodia, of Massachusetts, a 47-year-old entrepreneur and private equity investor, and his long-time friend Iftikar Ahmed, a general partner at a venture capital firm were charged with fraud by the Securities and Exchange Commission.
While the acquisition of American company Cooper by Apollo was never completed, the SEC complaint said that Cooper Tire’s stock price jumped 41 per cent when the acquisition was announced in June 2013.
The SEC alleges that Kanodia tipped Ahmed and another friend prior to the acquisition announcement after learning of the deal from his wife, who was Apollo’s general counsel at the time, more than two months before the merger was announced.
In May 2015, the SEC obtained a court order freezing $55,089,446 million of Ahmed's assets.
According to the SEC's complaint, Ahmed had Oak funds pay $20 million for a $2 million stake in an Asian e-commerce joint venture in December 2014, pocketing the $18 million difference for himself. It alleges that in another investment in August 2014, an Oak fund overpaid for shares in a China-based e-commerce company, allowing Ahmed to pocket $2 million. In a third transaction, the complaint alleges that in 2013, Ahmed advised an Oak fund to invest $25 million in a U.S.-based e-commerce company without disclosing his interest in I-Cubed Domains LLC, which had a significant stake in the same company. The following year, at Ahmed's advice, the Oak fund paid $7.5 million to I-Cubed to buy shares in the company that I-Cubed had acquired for $2 million. The complaint alleges that Ahmed again failed to disclose his ties to I-Cubed, violating his duty to act in the best interest of the Oak fund investors and avoid self-dealing.
According to Bloomberg, Ahmed received an MBA from Harvard Business School in 1999 and an undergraduate degree in Engineering from the Indian Institute of Technology in New Delhi in 1993. He was a general partner at Oak Investment Partners, spent three years with Fidelity Ventures as senior associate and worked in the private equity and special situations group of Goldman Sachs.
What he faces
If Ahmed is captured - and convicted - the charge of wire fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000 on each count.
The charge of making false statements in income tax returns provides for a sentence of no greater than three years in prison, one year of supervised release, and a fine of $1 million on each count.