Manhattan Man Charged With Running $43 Million Ponzi Scheme

Press Release Manhattan Man Charged With Running $43 Million Ponzi Scheme Wednesday, May 1, 2024 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Damian Williams, the United States Attorney for the Southern District of New York, and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging IDIN DALPOUR with wire fraud in connection with a multi-year Ponzi scheme that defrauded investors of at least $43 million. DALPOUR was arrested this morning and will be presented in Manhattan federal court before U.S. Magistrate Judge Barbara Moses later today. U.S. Attorney Damian Williams said: “Idin Dalpour told investors that they could reap huge returns by investing through him in a purported Las Vegas hospitality business and a crypto trading operation. As alleged, Dalpour’s promises were a mirage, and he was running a classic Ponzi scheme by paying investors purported returns with other investors’ money. Instead of using investors’ funds as promised, Dalpour spent lavishly on himself, which included racking up gambling losses of approximately $1.7 million and paying for his children’s private school tuition. Now, Dalpour’s gamble has him facing federal criminal charges for his alleged crimes.” FBI Assistant Director in Charge James Smith said: “For four years, Idin Dalpour allegedly used false promises of high returns to entice victims to invest in his purported hospitality and cryptocurrency trading enterprises, but in reality, used these payments to satisfy other debts or personal expenditures. Cheating investors of millions severs the trust of clients and credibility of prospective advisors, both of which are vital to the success of the investment market. Today’s arrest illustrates the FBI’s dedication to maintaining economic justice and ensuring the actions of one individual are not at the expense of others.” According to allegations contained in the Indictment:[1] From at least approximately 2020 through April 2024, DALPOUR ran a Ponzi scheme targeting investors located in the U.S. and abroad. DALPOUR solicited investments from victims through an entity that he controlled (“Entity-1”), which purported to have an interest in two business ventures: a Las Vegas hospitality enterprise and a cryptocurrency trading enterprise. In reality, DALPOUR did not use investors’ funds as promised and paid earlier investors purported returns using funds that were contributed by later investors. DALPOUR defrauded investors of at least $43 million over the course of the scheme. As part of the purported Las Vegas hospitality enterprise, DALPOUR falsely represented that Entity-1 had contracted with a management company (the “Management Company”) and/or a prominent Las Vegas hotel (the “Hotel”) to rent condominiums to Las Vegas visitors for a fee. DALPOUR further claimed that the Hotel arranged entertainment packages for these visitors, including food, nightlife, and sports events, and that DALPOUR and Entity-1 received a portion of these proceeds. DALPOUR also falsely claimed that he owned shares in several Las Vegas-based sports stadiums (the “Stadiums”) and would receive a portion of concessions revenues when these visitors went to the Stadiums. DALPOUR lured investors into the Las Vegas hospitality enterprise through false promises of lucrative returns beginning at 42% interest per year. In order to further the fraud, DALPOUR provided certain investors with fabricated contracts between Entity-1, the Management Company, and the Stadiums. DALPOUR also fabricated email correspondence from the Hotel falsely claiming that his company, Entity-1, was owed millions of dollars and created phony bank statements overstating the assets in Entity-1’s bank accounts. DALPOUR also claimed that investors’ money was safe because it was insured and/or would be held in escrow. These statements were false. In connection with the Ponzi scheme, DALPOUR further misrepresented a so-called cryptocurrency trading enterprise that DALPOUR purportedly operated. As part of the cryptocurrency trading scheme, DALPOUR falsely represented to investors that he purchased cryptocurrency at wholesale and sold the cryptocurrency at a profit to retail investors. As with the Las Vegas hospitality enterprise, DALPOUR promised investors lucrative annual returns and that their money was insured. These statements were false. In reality, DALPOUR did not use investor money for the Las Vegas hospitality enterprise or the cryptocurrency trading enterprise. Instead, DALPOUR used investor money to pay other investors their expected returns, as well as to pay for his own personal expenses. These personal expenses included, among other things, approximately $1.7 million in gambling losses, over $400,000 from Art Direct, and private school tuition for his children. DALPOUR also lied to investors when they sought to recoup their money. Among other things, DALPOUR claimed that his company’s funds were temporarily frozen because the Hotel’s servers had been hacked and that the Nevada-based bank allegedly holding Entity-1’s funds would not release the proceeds. In fact, Entity-1 did not even have a bank account with the Nevada-based bank, as DALPOUR well knew. In or about November 2023, a group of victims confronted DALPOUR about the Ponzi scheme. During this conversation, DALPOUR admitted that he had lied to the victims about the operation of the Las Vegas hospitality business, that he had not used investor money for its intended purpose, and that he had fabricated contracts and bank records that he had provided to the victims. DALPOUR further stated, in his own words, “[w]hat you already have, you have, you can put me in jail now. Like right now.” If you believe you are a victim of these crimes, please contact the FBI at 1-800-CALL-FBI and reference this case. * * * DALPOUR, 39, of New York, New York, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge. Mr. Williams praised the investigative work of the FBI. This case is being handled by the Office’s Illicit Finance and Money Laundering Unit. Assistant U.S. Attorneys Mathew Andrews and Kingdar Prussien are in charge of the prosecution. The allegations in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty. [1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation. Contact Nicholas Biase, Lauren Scarff, Shelby Wratchford (212) 637-2600 Updated May 1, 2024 Attachment U.S. v. Dalpour Indictment.pdf [PDF, 307 KB] Topic Financial Fraud Component USAO - New York, Southern Press Release Number: 24-158

Press Release Manhattan Man Charged With Running $43 Million Ponzi Scheme Wednesday, May 1, 2024 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Damian Williams, the United States Attorney for the Southern District of New York, and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging IDIN DALPOUR with wire fraud in connection with a multi-year Ponzi scheme that defrauded investors of at least $43 million. DALPOUR was arrested this morning and will be presented in Manhattan federal court before U.S. Magistrate Judge Barbara Moses later today. U.S. Attorney Damian Williams said: “Idin Dalpour told investors that they could reap huge returns by investing through him in a purported Las Vegas hospitality business and a crypto trading operation. As alleged, Dalpour’s promises were a mirage, and he was running a classic Ponzi scheme by paying investors purported returns with other investors’ money. Instead of using investors’ funds as promised, Dalpour spent lavishly on himself, which included racking up gambling losses of approximately $1.7 million and paying for his children’s private school tuition. Now, Dalpour’s gamble has him facing federal criminal charges for his alleged crimes.” FBI Assistant Director in Charge James Smith said: “For four years, Idin Dalpour allegedly used false promises of high returns to entice victims to invest in his purported hospitality and cryptocurrency trading enterprises, but in reality, used these payments to satisfy other debts or personal expenditures. Cheating investors of millions severs the trust of clients and credibility of prospective advisors, both of which are vital to the success of the investment market. Today’s arrest illustrates the FBI’s dedication to maintaining economic justice and ensuring the actions of one individual are not at the expense of others.” According to allegations contained in the Indictment:[1] From at least approximately 2020 through April 2024, DALPOUR ran a Ponzi scheme targeting investors located in the U.S. and abroad. DALPOUR solicited investments from victims through an entity that he controlled (“Entity-1”), which purported to have an interest in two business ventures: a Las Vegas hospitality enterprise and a cryptocurrency trading enterprise. In reality, DALPOUR did not use investors’ funds as promised and paid earlier investors purported returns using funds that were contributed by later investors. DALPOUR defrauded investors of at least $43 million over the course of the scheme. As part of the purported Las Vegas hospitality enterprise, DALPOUR falsely represented that Entity-1 had contracted with a management company (the “Management Company”) and/or a prominent Las Vegas hotel (the “Hotel”) to rent condominiums to Las Vegas visitors for a fee. DALPOUR further claimed that the Hotel arranged entertainment packages for these visitors, including food, nightlife, and sports events, and that DALPOUR and Entity-1 received a portion of these proceeds. DALPOUR also falsely claimed that he owned shares in several Las Vegas-based sports stadiums (the “Stadiums”) and would receive a portion of concessions revenues when these visitors went to the Stadiums. DALPOUR lured investors into the Las Vegas hospitality enterprise through false promises of lucrative returns beginning at 42% interest per year. In order to further the fraud, DALPOUR provided certain investors with fabricated contracts between Entity-1, the Management Company, and the Stadiums. DALPOUR also fabricated email correspondence from the Hotel falsely claiming that his company, Entity-1, was owed millions of dollars and created phony bank statements overstating the assets in Entity-1’s bank accounts. DALPOUR also claimed that investors’ money was safe because it was insured and/or would be held in escrow. These statements were false. In connection with the Ponzi scheme, DALPOUR further misrepresented a so-called cryptocurrency trading enterprise that DALPOUR purportedly operated. As part of the cryptocurrency trading scheme, DALPOUR falsely represented to investors that he purchased cryptocurrency at wholesale and sold the cryptocurrency at a profit to retail investors. As with the Las Vegas hospitality enterprise, DALPOUR promised investors lucrative annual returns and that their money was insured. These statements were false. In reality, DALPOUR did not use investor money for the Las Vegas hospitality enterprise or the cryptocurrency trading enterprise. Instead, DALPOUR used investor money to pay other investors their expected returns, as well as to pay for his own personal expenses. These personal expenses included, among other things, approximately $1.7 million in gambling losses, over $400,000 from Art Direct, and private school tuition for his children. DALPOUR also lied to investors when they sought to recoup their money. Among other things, DALPOUR claimed that his company’s funds were temporarily frozen because the Hotel’s servers had been hacked and that the Nevada-based bank allegedly holding Entity-1’s funds would not release the proceeds. In fact, Entity-1 did not even have a bank account with the Nevada-based bank, as DALPOUR well knew. In or about November 2023, a group of victims confronted DALPOUR about the Ponzi scheme. During this conversation, DALPOUR admitted that he had lied to the victims about the operation of the Las Vegas hospitality business, that he had not used investor money for its intended purpose, and that he had fabricated contracts and bank records that he had provided to the victims. DALPOUR further stated, in his own words, “[w]hat you already have, you have, you can put me in jail now. Like right now.” If you believe you are a victim of these crimes, please contact the FBI at 1-800-CALL-FBI and reference this case. * * * DALPOUR, 39, of New York, New York, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge. Mr. Williams praised the investigative work of the FBI. This case is being handled by the Office’s Illicit Finance and Money Laundering Unit. Assistant U.S. Attorneys Mathew Andrews and Kingdar Prussien are in charge of the prosecution. The allegations in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty. [1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation. Contact Nicholas Biase, Lauren Scarff, Shelby Wratchford (212) 637-2600 Updated May 1, 2024 Attachment U.S. v. Dalpour Indictment.pdf [PDF, 307 KB] Topic Financial Fraud Component USAO - New York, Southern Press Release Number: 24-158