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Indian Man, 23, in Arrest in Alabama for $400k Ponzi Scam

Pathyam Patel, a 23-year-old from Gujarat’s Gandhinagar, finds himself indicted in Alabama for orchestrating a Ponzi scheme valued at $400,000. Allegations against Patel suggest that he began selling securities, guaranteeing significant returns, and collecting funds under false pretenses. However, instead of investing these funds as promised, Patel diverted them for personal use, including gambling and covering expenses.

Authorities from the Alabama Securities Commission (ASC) confirmed Patel's presence in Alabama and arrested him on March 6, charging him with multiple counts of securities law violations.

The indictment outlines Patel's actions, alleging that he solicited over $400,000 from at least six investors. He purported to be associated with Infinity Wealth Management, a fictitious investment advisory firm supposedly registered with the US Securities and Exchange Commission (SEC).

Patel assured investors of substantial profits and guaranteed the safety of their principal investment. Subsequently, he coerced investors into paying additional fees to maintain their investments.

However, investigations reveal that Patel never invested the funds as promised. Instead, he diverted them for personal gain, including gambling, personal expenses, and reimbursing other investors. Moreover, Patel operated without registration with the ASC to sell securities in Alabama, and the investment contracts he sold were unregistered.

The ASC clarified that Infinity Wealth Management was neither a registered investment advisor nor a broker-dealer, further underscoring the fraudulent nature of Patel's operations.

The scheme employed by Patel typifies a Ponzi scheme, as described by Investor.gov. In such schemes, fraudsters promise high returns with minimal risk, but instead of investing funds, they use new investors' money to pay returns to earlier investors, keeping some for themselves.

Patel's case underscores the importance of due diligence and awareness in investment practices, highlighting the risks associated with fraudulent schemes and unregistered investment entities.

 

March 26, 2024 3:14 p.m. 12674

#breakingnews #worldnews #headlines #topstories #globalUpdate #dxbnewsnetwork #dxbnews #dxbdnn #dxbnewsnetworkdnn #PathyamPatel #PonziScheme #SecuritiesFraud #AlabamaIndictment #InvestmentScam #Gujarat #Gandhinagar #InvestorProtection #FinancialCrime #FraudPrevention

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