Man Faces Charges Linked to $5 Million Ponzi Scheme

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Photo: Amir Ridhwan

A former resident of the Ritz-Carlton Residences at LA Live in downtown Los Angeles is due to appear in federal court in Downtown L.A. Friday for a detention hearing prompted by wire fraud charges alleging he defrauded investors out of more than $5 million in a Ponzi scheme, deceiving one investor by falsely claiming that NBA stars such as Stephen Curry would be endorsing one of his products.

Khemraj Dave Hardat, 50, a Canadian national who has been living in the Los Angeles area on an expired tourist visa, was arrested Tuesday by special agents with the FBI, prosecutors said. Friday’s hearing should determine if he will be released on bond.

According to the criminal complaint filed in this case, Hardat allegedly duped at least seven victims into wiring him a total of more than $5 million over the course of more than three years. Rather than invest these funds in the businesses Hardat claimed to run, he allegedly used the money for personal expenses, or, in the style of a Ponzi scheme, made partial repayments to previous victims.

According to the affidavit in support of the complaint, Hardat falsely portrayed himself as a man of significant educational and economic achievement, misrepresenting that he had a postgraduate doctoral degree from Yale University and that he had generated hundreds of millions of dollars via deals with PepsiCo and Dr. Pepper.

Hardat bolstered this false impression by leading a luxurious lifestyle, which included the rented residence at the Ritz-Carlton, Lamborghini and Maserati sports cars, a luxury box at Staples Center and his children’s placement at prestigious private schools, federal prosecutors allege.

Hardat allegedly convinced one victim — a financial professional — to loan him $4 million by telling him of his purported friendships with NBA players and the chief executive officer of PepsiCo, and by showing the victim a doctored bank statement reflecting a balance of $498 million.

After the victim confronted Hardat about the debt in December 2014, Hardat allegedly told him of a new business opportunity and represented that the $4 million owed would turn into $12 million. Hardat then wrote the victim a check for $8 million, which later was returned for insufficient funds, according to the U.S. Attorney’s Office.

Another victim, who met Hardat through their children’s school events, allegedly wired Hardat a total of $393,854 in loans for his business after Hardat falsely represented that Basketball Hall of Famer Shaquille O’Neal was one of his business partners and that Curry would be endorsing one of his company’s products, according to prosecutors.

Instead, Hardat allegedly used the money to make payments on his Maserati and Lamborghini sports cars. Although the victim has been repaid about $235,000, law enforcement analysis indicates that at least $215,000 of that amount came from subsequent loans or investments that Hardat fraudulently obtained from subsequent victims, court documents state.

The criminal complaint charges Hardat with one count of wire fraud, which carries a possible maximum penalty of 20 years in federal prison.

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Man Faces Charges Linked to $5 Million Ponzi Scheme
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Man Faces Charges Linked to $5 Million Ponzi Scheme
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Man due to appear in federal court in L.A. Friday on charges alleging he defrauded investors out of more than $5 million in a Ponzi scheme.
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LAWestMedia.com