A Harvard Enterprise College graduate is accused of concentrating on his personal, deceiving fellow alumni into investing in a Ponzi scheme.

New York State Lawyer Common Letitia James, in a courtroom order filed this week, accuses HBS alum, Vladimir Artamonov, of swindling buyers out of $3 million. James urged any buyers who misplaced funds to file a grievance. 

James’ workplace alleges that Artamonov used his HBS community to courtroom buyers in a Ponzi scheme that defrauded at the very least 29 folks, a lot of whom had been related to HBS, of at the very least $2.9 million in funds.

A Ponzi scheme is a sort of funding fraud involving an organizer who guarantees risk-free, excessive returns and pays buyers with new backers’ funds, not funding earnings. These sorts of schemes do not generate returns however rely upon a relentless stream of latest cash to outlive. 

The New York AG has secured a courtroom order that successfully shuts down Artamonov’s alleged scheme. Her workplace stated it grew to become conscious of the exercise after being alerted of the dying of an early investor who took his personal life after discovering he had misplaced $100,000 in funds. 

“Even after the tragedy, Artamonov continued to solicit new buyers and lied to them concerning the fund’s technique and efficiency,” James’ workplace stated.

Anybody may be duped

The case highlights that even these with prestigious backgrounds in enterprise or finance may be duped into making unsavory funding selections, significantly when a possibility is introduced by a trusted contact.

“Even subtle buyers may be conned by fraudsters, particularly when private relationships and networks are used to construct a false sense of belief,” Lawyer Common James stated in an announcement Thursday. “Vladimir Artamonov used his alumnus standing from Harvard Enterprise College to prey on his classmates and others whereas seeming reliable and reliable. As a substitute, he has been scamming folks out of their investments, with horrific penalties. Right this moment, now we have put a cease to this scheme and encourage anybody who has been defrauded to come back ahead to my workplace.” 

Artamonov graduated from HBS in 2003 with a grasp’s diploma in enterprise administration and later moved to New York the place he labored as a securities skilled. He known as his funding fund “Venture Data Arbitrage” or the “Artamonov Fund.” 

In courting potential buyers, he claimed to have advance information of Berkshire Hathaway’s funding selections by means of public state insurance coverage filings. He likened his insights to “having a personal time machine” or “getting tomorrow’s newspaper as we speak,” projecting fund returns of 500% to 1,000%, in response to the AG.

“In actuality, Artamonov used his buyers’ cash to purchase short-term choices that expired inside days of buy and appeared to haven’t any relation to Berkshire Hathaway or its funding actions,” the AG’s workplace stated, including that Artamonov funded a soft life-style for himself utilizing buyers’ cash.

James’ courtroom order requires Artamonov to testify and produce books and information to information an ongoing investigation.

Harvard Enterprise college declined to touch upon the matter when reached by CBS MoneyWatch.