Theranos Trial: Pakistan-born Indian-American Tech Exec Convicted of Fraud
In yet another blow to Silicon Valley's "fake it till you make it" mantra, a federal jury has convicted former Theranos executive Ramesh "Sunny" Balwani on all 12 counts of fraud. Balwani was born in 1965 in Pakistan to a Sindhi Hindu family. He attended Aitchison College, an elite prep school in Lahore that is also the alma mater of former Prime Minister Imran Khan of Pakistan. His family emigrated to India in 1984 and then to the United States in 1987. He studied at the University of Texas at Austin and University of California at Berkeley. His one-time girlfriend and partner Elizabeth Holmes, the founder of Theranos, was convicted on similar charges earlier this year. Both face up to 20 years in prison.
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| Elizabeth Holmes (L) and Sunny Balwani of Theranos |
"Fake it till you make it" is a well-known phrase in Silicon Valley. It means to consciously cultivate an attitude, feeling, or perception of competence that you don't currently have by pretending you do until it becomes true. Holmes and Balwani claimed to have developed a proprietary blood-testing technology to produce results with just a few drops of blood from a finger prick, eliminating the need for large needles and vials of blood. They used this false claim to defraud unsuspecting investors, including VCs, of more than a billion US dollars.
Balwani, 57, ran the company’s lab, where the blood testing occurred, and was quick to rebuff and sometimes fire employees who raised concerns about the performance of Theranos technology, prosecutors and witnesses said. He was responsible for the financial models given to investors that greatly exaggerated revenue, prosecutors said, and he managed the company’s partnership with Walgreens Boots Alliance Inc., in which the startup would offer its finger-prick tests inside the drugstore chain, according to the Wall Street Journal.
Balwani is a technology industry veteran. He has worked in the software industry, including at Lotus Software and Microsoft Corp., but much of his wealth is derived from CommerceBid.com, an e-commerce startup that was acquired by CommerceOne, led by Pakistani-American entrepreneur Asim Abdullah, for $228 million. Karachi-born Asim Abdullah now owns the fashion house of Emmanuel Ungaro.
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https://www.msn.com/en-us/news/us/indian-american-accused-in-45-million-fraud-scheme/ar-AAZbiaB
Authorities arrested a 50-year-old Indian American tech entrepreneur accusing him of defrauding more than 10,000 victims of over $45 million in an investment fraud scheme, the American Bazaar reported.
Suspect Neil Chandran is from Las Vegas Nevada, but was arrested in Los Angeles, California.
According to the Department of Justice, officers arrested him on June 29 after unsealing a previously sealed indictment from a federal grand jury in Nebraska on June 14.
Chandran owned multiple technology companies and according to the indictment used those companies in the investment fraud scheme. He is alleged to have falsely promised “extremely high returns on the premise that one or more of his companies, operated under the banner of ‘ViRSE’, was about to be acquired by a consortium of wealthy buyers.”
Chandran’s companies include, but are not limited to Free Vi Lab; Studio Vi, Inc.; ViDelivery, Inc.; ViMarket, Inc.; and Skalex USA Inc.
The indictment also alleges that Chandran caused two other individuals to make “various materially false and misleading representations to investors.”
He’s accused of promising investors in his companies would “would soon receive extremely high returns when one or more of those companies was purchased by a group of wealthy buyers.
“Investor funds would be used for normal expenses to keep the companies operating until they were purchased and prominent business figures, including two notable billionaires, were involved in the purchase,” the indictment said.
According to the indictment “there was no such buyer group that was about to purchase the companies for the claimed returns; a substantial portion of the funds were misappropriated for other business ventures and the personal benefit” of Chandran and others and “the two notable billionaires were not involved in purchasing Chandran’s companies.”
With these funds they are alleged to have purchased luxury cars and real estate.
The indictment also alleges that 100 different assets including “bank accounts, real estate, and luxury vehicles (39 Tesla vehicles) are subject to forfeiture as proceeds of the fraud. U.S. Marshals and the FBI are seizing most of the assets pending resolution of the criminal case.”
Chandran has been charged with three counts of wire fraud and two counts of monetary transactions in unlawful proceeds. If convicted Chandran faces up to 20 years in prison per wire fraud count and up to 10 years for each count of unlawful monetary transactions.
The FBI Washington Field Office is still investigating the case with the help of the FBI’s Las Vegas, Los Angeles, Miami, and Omaha field offices.
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The post Indian American accused in $45 million fraud scheme appeared first on AsAmNews.
Ms. Holmes was convicted in January of four counts of wire fraud for deceiving investors with claims about her blood testing start-up Theranos.
https://www.nytimes.com/2022/11/18/technology/elizabeth-holmes-sentence-theranos.html?smtyp=cur&smid=tw-nytimes
The sentence capped a yearslong saga that has captivated the public and ignited debates about Silicon Valley’s culture of hype and exaggeration. Ms. Holmes, who raised $945 million for Theranos and promised that the start-up would revolutionize health care with tests that required just a few drops of blood, was convicted in January of four counts of wire fraud for deceiving investors with those claims, which turned out not to be true.
Judge Edward J. Davila of the U.S. District Court for the Northern District of California sentenced Ms. Holmes to 135 months in prison, which is slightly more than 11 years, followed by three years of supervised release. Ms. Holmes, 38, who plans to appeal the verdict, must surrender to custody on April 27, 2023.
In the courtroom on Friday, Ms. Holmes — who appeared with a large group of friends and family, including her parents and her partner, Billy Evans — cried when she read a statement to the judge.
“I am devastated by my failings,” she said. “I have felt deep pain for what people went through because I failed them.”
Ms. Holmes, who has a 1-year-old son and is pregnant with her second child, apologized to the investors, patients and employees of Theranos. She said she had tried to realize her dream too quickly and do too many things at once. She ended with a quotation from the poet Rumi and a promise to do good in the world in the future.
Though federal sentencing guidelines for wire fraud of the size that Ms. Holmes was convicted of recommend a maximum of 20 years in prison, a probation officer assigned to the case proposed nine years. Her lawyers had asked for just 18 months of house arrest, while prosecutors sought 15 years and $804 million in restitution for 29 investors.
Prosecutors had urged Judge Davila to consider the message that her case would send to the world. In court filings, they wrote that a long sentence for Ms. Holmes was important to “deter future start-up fraud schemes” and “rebuild the trust investors must have when funding innovators.”
Jeffrey Cohen, an associate professor at Boston College Law School and a former federal prosecutor, said it was somewhat surprising for a sentence to go beyond a probation report’s recommendation, but the high-profile nature of Ms. Holmes’s case had made it a symbol. The sentence also showed that courts take fraud seriously, he added.
https://www.deccanherald.com/national/americans-duped-into-losing-10-billion-by-illegal-indian-call-centres-in-2022-report-1175156.html @deccanherald
After several incidents were reported in 2022, the FBI has now deputed a permanent representative at the US embassy in New Delhi. The representative will work closely with the CBI, Interpol and the Delhi Police to bust these gangs that have put India under the threat to be termed as the hub of such illegal call centres.
Americans lost a total of $10.2 billion in 2022 so far, which is a 47 per cent increase from 2021’s $6.9 billion, to such fraud calls. FBI’s South Asia head Suhel Daud told the publication that "romance-related" frauds reported were worth Rs 8,000 crore in 2021 and Rs 8,000 crore in the last 11 months of 2022. Losses due to "tech support" crimes were as much as $3 billion in the last two years – $347 million in 2021 and $781 million in 2022 so far.
“It may not be a national security concern yet, but the reputation (of a country) is involved, and we don’t want India to suffer on that count,” Daud told the publication. He also noted that the FBI’s website has registered 8.5 lakh complaints in 2021 and over 7.8 lakh complaints so far in 2022 in regard to internet crimes. Those complaints included cyber crime related to investment ($3 billion), business email compromise ($2.4 billion), personal data breach ($1.2 billion), romance($1 billion) and tech support ($781 million).
https://www.moneycontrol.com/news/business/wells-fargo-terminates-india-vp-shankar-mishra-for-urinating-on-woman-co-passenger-9823021.html
American financial services company Wells Fargo, on January 6, sacked Shankar Mishra, India Vice-President of its entity in India as Mishra, in an inebriated state, urinated on a woman in her 70s, in business class of an Air India flight from New York to New Delhi.
“This individual has been terminated from Wells Fargo. We are cooperating with law enforcement and ask that any additional inquiries be directed to them,” the company said in a statement released on January 6.
The company also said it holds its employees to the highest standards of professional and personal behaviour and that it found these allegations deeply disturbing.
After news of Mishra urinating on a woman co-passenger on board an Air India flight on November 26, 2022, was reported, the Delhi Police on January 5 wrote to the concerned authorities seeking a Look Out Circular (LOC) against Shankar Mishra.
https://www.moneylife.in/article/prateek-gupta-the-big-indian-defaulter-behind-a-500-million-international-commodities-fraud/70001.html
We take great pride in the fact that many successful Indians are occupying corner offices at the world’s largest and most powerful corporate houses and every action of theirs makes news in India. The flip side is that people of Indian origin will also hit the headlines for zip and enterprise of another kind—for gigantic fraud, running mega scams and even market manipulation. These stories are buried in tiny reports and rarely make it to front pages or television debates.
For instance, how many of us remember that the ‘Flash Crash’ of 6 May 2010, which wiped out a trillion dollars in five minutes, was the handiwork of a young, reclusive Indian called Navinder Singh Sarao, trading alone out of west London. Those who want to know the fascinating details should read Flash Crash by Liam Vaughan who describes the global manhunt to catch Sarao, characterised as a ‘trading savant’.
Another Indian who is making news abroad, but doesn’t figure on our media channels, is Prateek Gupta of Ushdev International Ltd, despite his history of cheating several banks in India. He has recently acquired the dubious cred of having cheated Trafigura, a global commodities trading giant, of a whopping US$577mn (million) in a nickel deal. This is when his admitted dues to Indian banks were over Rs3,500 crore and total liabilities around Rs4,205 crore. He was being investigated by the central bureau of investigation (CBI).
So what is Prateek Gupta’s story? Let’s start with why he is in the news today.
Trafigura Scammed of US$500 Million
On 9th February, the global commodity trading giant Trafigura group Pte issued a press release which said it had “discovered a systematic fraud committed by a group of companies” to the tune of US$577mn by companies controlled by Prateek Gupta, in connection with a deal to purchase about 25,000 tonnes of ‘containerised nickel’. Trafigura had entered into a ‘transit finance’ deal, or what would be called a ready-forward deal, where it would buy nickel from companies connected to Mr Gupta and sell them back to the same companies in future at a higher price that covers interest cost.
Sometime after October 2022, Trafigura inspected eight shipping containers and found that they did not contain nickel or even nickel alloy. As it expanded its inspection to a few hundred containers (out of over 1,100 covered by the deal), it discovered more of the same. Instead of nickel or nickel alloy, whose prices have been shooting up since the Russia-Ukraine conflict, the containers contained carbon steel, whose value is a fraction that of nickel.
The Trafigura group, which operates across commodity businesses, employs 12,000 people across 156 countries, rushed to court in February and obtained a ‘worldwide freezing order’ of US$625mn against Mr Gupta and his companies, led by TMT Metals Holdings Ltd based in London. The London high court order restrained individuals and businesses from dealing with Mr Gupta’s assets anywhere in the world. It is open to challenge by the Gupta group and the hearings will commence soon. Reports in the international media suggest that Trafigura has had a legitimate business relationship with Mr Gupta’s companies since 2015.
Prior to this, Mr Gupta has inflicted even greater losses on Indian public sector banks (PSBs). It would seem that he was building his international commodity businesses through money diverted from the Indian company. He bought TMT Metals AG, a trading firm, in 2016. He also has companies in Singapore, Malaysia and Switzerland.
Sanchari Ghosh
https://www.livemint.com/news/india/how-swami-nithyananda-s-fake-country-kailasa-fooled-30-us-cities-with-sister-city-scam-explained-11679042510469.html
Controversial godman Swami Nithyananda and his fictional country "Kailasa" is in the news again and this time, for duping the city of Newark in New Jersey, United States. Apparently, Newark. admitted to falling victim to a scam that led them to become a "Sister City" with a fake Hindu nation.
The incident occurred when Mayor Ras Baraka invited representatives of Kailasa to Newark City Hall for a "cultural trade agreement," only to discover later that Kailasa was not a real country.
Despite Newark's apparent commitment to partnering with diverse cultures to enrich each other with connectivity, support, and mutual respect, the city reportedly did not realize Kailasa's inauthenticity until after an official ceremony had already taken place.
Footage shows city officials signing documents and taking photographs during the ceremony to become a "Sister City" with "Kailasa."
Following the incident, the Newark City Council reportedly rescinded the agreement just days after signing the "Sister City" agreement papers. One city council member called the oversight "unacceptable" and said it "cannot happen any longer."
Newark is not the only city to sign the ‘Sister City’ deal…
The funny thing is as many as Newark is not the only city to sign this deal with Kailasa. As per the website of the United States of Kailasa, it has as many as 30 cities in the United States. And a Fox report said, most mayors have accepted of signing such deals.
How Kailasa got these cities to sign the deal?
The report cited, that the cities claimed that the ‘proclamation is not an endorsement but a response to a request’. Most of them further confirmed that ‘they did not very the information in the request’.
That means, Kailasa got them to sign the deal simply by requesting them to do so.
What is Kailasa?
'Kailasa' is a self-proclaimed country founded by controversial godman Nithyananda, who purchased an island off the coast of Ecuador and named it after a sacred site for Hindus. 'Kailasa' claims to be a movement founded by members of the Hindu Adi Shaivite minority community from Canada, the United States, and other countries. It offers a safe haven to all the world's practicing, aspiring, or persecuted Hindus.
However, 'Kailasa' is not recognized as a country by the United Nations or the international community, and it is considered a micronation. Despite this, the 'Kailasa' movement maintains a strong social media presence and claims to have various departments, including treasury, commerce, sovereign, housing, and human services, as well as a flag, a constitution, an economic system, a passport, and an emblem.