A 37-year-old Indian man here has been sentenced to over five years in prison for running a USD 3.8 million ponzi scheme whose victims include several of his family friends.
Sachin Uppal was sentenced by US District Judge Nancy Edmunds in Detroit following his August guilty plea to the wire fraud charges (concoction of scheme to defraud or obtain money based on false representation or promises).
According to court documents, Uppal ran a trading company from July 2007 through September 2013 but was not a licensed investment adviser. He marketed his company to potential investors and solicited investor funds, describing it as a “hedge fund.”
Uppal told investors that he was a “day trader” who would use investor funds to buy and sell financial instruments within the same trading day, which he said would reduce risk to investors.
Several of Uppal’s victims were family friends. This phenomenon, known as ‘affinity fraud’, often targets members of identifiable groups, such as a religious or ethnic communities or clubs.
Ms. Edmunds also ordered Uppal to pay restitution to his victims in the amount of over three million dollars.
Uppal “took advantage of trusting relationships with family, friends, and associates, breached their confidence, and stole their money,” Special Agent in Charge of the FBI Detroit Field Office Paul Abbate said.
“Criminals like this use every means of deceit available to further their selfish goals, and investors need to exercise great caution so as not to become victimised,” Mr. Abbate added.
Uppal promised a return of 18 to 20 per cent per year, with a minimum investment commitment of only 12 months. Once he secured the initial investment, Uppal e-mailed his victims false monthly “year-to-date investment summaries” to make them believe that their accounts were performing well and to persuade them to invest additional funds.
Uppal traded and lost funds during the relevant period and sometimes he simply pocketed the money without conducting any trades at all. When investors asked to close their accounts and withdraw their investment funds, Uppal attempted to lull them with various excuses.
