ATHENS, Ga. - A former University of Georgia student pleaded guilty Friday to running a Ponzi scheme that defrauded investors, including fellow students and their families, from his Athens fraternity house.
Syed Arham Arbab, 22, of Augusta, admitted to defrauding 117 people in a scheme that attracted about $1 million from investors, prosecutors said. A news release said Arbab spent funds on clothes, shoes, adult entertainment and gambling trips to Las Vegas.
"The defendant engaged in a pattern of deceit to gain the trust of unwitting investors who gave him their hard-earned money for what they believed was a sound investment," Charlie Peeler, U.S. Attorney for the Middle District of Georgia, said in the release.
From May 2018 to May of this year, Arbab sought investors for Artis Proficio Capital Management and Artis Proficio Capital Investments. Prosecutors said Arbab issued false account statements and misrepresented the size of the funds and returns.
Among his false claims, prosecutors said, Arbab said a former UGA athlete and NFL star was among his investors.
Arbab pleaded to a single count of securities fraud. He is scheduled for sentencing in January.
- Metro Atlanta city just weeks away from running out of water, officials say
- 1 dead, 3 missing after Hard Rock Hotel under construction collapses in New Orleans
- ‘Just die': Man charged with brutal killing depicted on SD card found in street
In late May, the Securities and Exchange Commission initiated a civil complaint against Arbab, which is pending. In June, a federal judge froze Arbab's assets and those of his investment funds. At the time, the SEC alleged Arbab defrauded at least eight investors of $269,000, but warned that the size of the scheme could be larger.
In text messages, Arbab allegedly told investors his firm was "different because we target young investors/college kids," and he charged lower commissions, the SEC complaint said. Arbab allegedly told investors he guaranteed investments of up to $15,000.
The SEC said Arbab also sold "bond agreements," which were like loans. Instead, Arbab allegedly deposited funds in his bank account and used new proceeds to pay off previous investors who sought money.
A bio on the website for Artis Proficio stated that Arbab graduated cum laude from UGA with a degree in cellular biology, and that at the time he working on a masters of business administration at UGA's business school.
Prosecutors said Arbab had in fact been rejected from the MBA program at UGA's Terry College of Business.
This article was written by J. Scott Trubey, The Atlanta Journal-Constitution.
© 2019 Cox Media Group.