US: Indian-origin tech entrepreneur held for USD 45 million investment fraud

A 50-year-old Indian-origin tech entrepreneur has been arrested in the US for an alleged investment scheme that defrauded more than 10,000 victims of over USD 45 million and netted him several luxury cars and real estate.

Neil Chandran, of Las Vegas in Nevada, was arrested on Wednesday in Los Angeles, the Department of Justice said.

According to the indictment, Chandran owned a group of technology companies that he used in a scheme to defraud investors by falsely promising 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 — which included Free Vi Lab, Studio Vi Inc., ViDelivery Inc, ViMarket Inc, and Skalex USA Inc, among others — developed virtual-world technologies, including their own cryptocurrency, for use in the companies’ own metaverse.

The indictment alleges that Chandran caused other individuals to make various materially false and misleading representations to investors, including that investors in his companies would soon receive extremely high returns when one or more of those companies was purchased by a group of wealthy buyers.

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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 was 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.

Chandran is charged with three counts of wire fraud and two counts of engaging in monetary transactions in the criminally derived property.

If convicted, Chandran faces up to 20 years in prison for each of the wire fraud counts and up to 10 years in prison for each count of engaging in unlawful monetary transactions.

The indictment also alleges that 100 different assets — bank accounts, real estate, and luxury vehicles, including 39 Tesla vehicles — are subject to forfeiture as proceeds of the fraud.

US Marshals and the FBI are seizing most of the assets pending the resolution of the criminal case.