US Departmente of Justice
SANTA ANA, California – A Tustin man was sentenced today to 70 months in federal prison for running a Ponzi scheme that caused dozens of members of the Indian community in Orange County and across the United States to suffer losses of approximately $9 million.
Tarakeswar Chaudhary, 49, was sentenced by United States District Judge James V. Selna.
During the second half of 2009, Chaudhary operated a Ponzi scheme in which he promised investors substantial returns through his special access to initial public offerings and secondary offerings by various Fortune 500 companies, including Google, Rio Tinto and Mastercard. While Chaudhary claimed to have access to these offerings as a result of relationships with individuals at Morgan Stanley and Goldman Sachs, neither the relationships nor the stock offerings actually existed.
Victims of Chaudhary’s fraud brought the scheme to the attention of the FBI after they confronted Chaudhary during the last week of November and on December 4, 2009. After the final confrontation by his victims on December 4, Chaudhary made airline reservations for himself and children to fly to India the following day. Chaudhary was arrested at San Francisco International airport on December 5 after he boarded an Emirates flight bound for Dubai and then India.
During today’s sentencing hearing, victims filled Judge Selna’s courtroom and recounted how Chaudhary’s fraudulent scheme had caused them to lose retirement funds, college funds, and nest eggs that had been saved over the course of many years. Several victims said they had known Chaudhary for decades, one said that Chaudhary was asking him to perform religious services on Chaudhary’s behalf while he was collecting funds for the bogus investment, and another said Chaudhary encouraged him to draw against a home equity line to raise cash to invest in the Ponzi scheme.
Judge Selna set a November 1 hearing date to calculate the precise amount Chaudhary owes to various victims.
The case was investigated by the Federal Bureau of Investigation.
Comments