A man was arrested in Los Angeles yesterday on suspicion of masterminding a multimillion-dollar investment fraud scheme that tricked over 10,000 victims.
Neil Chandran, 50, of Las Vegas, was charged with three counts of wire fraud and two counts of engaging in monetary transactions in criminally derived property.
He owned several technology companies marketed to investors as promising high returns as they were about to be acquired by a consortium of prominent business figures, according to the Department of Justice (DoJ).
He allegedly claimed that investor funds would be used for normal expenses to keep the companies operating until they were purchased.
The indictment alleges that Chandran forced others to make false and misleading representations to investors, including that the firms were about to be purchased by billionaire investors and that any funds plowed into the companies would be used to keep them operating until they were bought.
“In fact, 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, including the purchase of luxury cars and real estate; and there were no prominent billionaires involved in purchasing Chandran’s companies,” the DoJ claimed.
Proceeds of the alleged fraud are being seized by the FBI and US marshals. These 100 assets apparently include bank accounts, real estate and luxury vehicles such as 39 Tesla vehicles.
The companies in question operated under the “ViRSE” brand and included Free Vi Lab, Studio Vi, ViDelivery, ViMarket and Skalex USA. They were marketed as developing virtual world technologies for use in the company’s metaverse, including its own cryptocurrency, according to the DoJ.
Investment fraud was one of the highest-earning cybercrime types last year. The 20,600 cases reported to the FBI in 2021 made scammers nearly $1.5bn.