Frat house ponzi scheme charged

A ponzi scheme run by a 22-year old out of a college fraternity house in the United States has copped the regulator's ire.

Syed Arhan Arbab collected more than $269,000 from at least eight college students, recent graduates, or their family members, SEC said.

He offered investors bond agreements with a fixed rate of return plus principal back or in a hedge fund named Artis Proficio Capital claiming it had returned 56% in the previous year, for which investor funds were guaranteed up to $15,000.

In reality, Arbab never invested the money as represented, performance returns were fictitious and no hedge fund existed, the SEC said.

"Arbab allegedly placed substantial portions of investor funds in his personal bank and brokerage accounts, which he used for his own benefit, including trips to Las Vegas, shopping, travel, and entertainment," the regulator said.

Arbab also allegedly used portions of new investor money to pay earlier investors who had asked for their money back, the hallmark of a ponzi scheme.

"[He] even instructed some new investors to send their money - unwittingly - to existing investors through payment applications such as Venmo, Zelle, and Cash App, and misleadingly told them that the existing investors were either a "partner" or "manager" in the fund," the SEC said.

SEC is seeking a court order freezing certain assets of Arbab and related entities, a temporary restraining order, preliminary and permanent injunctive relief, return of allegedly ill-gotten gains with prejudgment interest, and civil penalties.

SEC Atlanta Office regional director Richard R. Best said: "We allege that Mr Arbab used his college affiliations to operate a ponzi scheme that drained valuable resources from current and former students."

"This is a reminder that investors of all ages and experience levels-whether long-time investors or recent graduates investing funds from their first few paychecks-should carefully research investment opportunities and the people offering them," Best said.

Read more: United StatesSyed Arhan ArbabSEC Atlanta OfficeArtis Proficio CapitalCash AppLas VegasMr ArbabRichard R.VenmoZelle
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