A 23-year-old man from Gandhinagar, named Pathyam Patel has been indicted in a Ponzi scheme case in Alabama, USA. The scheme is estimated to be worth around $400,000. Patel, also known as Pat Patel, was arrested on March 6th on nine counts of securities law violations, according to the Alabama Securities Commission (ASC).
Patel allegedly began selling unregistered securities and collected money from investors by promising substantial returns. However, he never invested these funds in securities as promised. Instead, he used the money to cover his personal expenses.
The ASC statement reveals that Patel sold over $400,000 in investment contracts to at least six investors. He claimed to be associated with Infinity Wealth Management, an investment advisory firm, and stated that it was registered with the US Securities and Exchange Commission.
Patel assured investors that he could generate significant profits by investing their funds and guaranteed that their principal amount would not be lost. After receiving the funds, Patel informed certain investors that they needed to pay additional fees to maintain their investments.
However, contrary to his claims, Patel did not invest the funds as he had communicated to the investors. He instead used the money for gambling on sporting events, personal expenses, and to pay other investors. The ASC statement added that Patel had no ability to guarantee that the investors would not lose their principal amount.
At the time of these activities, Patel was not registered with the ASC to sell securities in Alabama. Furthermore, the investment contracts he sold were not registered with the ASC. The statement also clarified that Infinity Wealth Management was not a registered investment advisor or broker-dealer.
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