Singapore Resident Pleads Guilty In Manhattan Federal Court To Soliciting Millions Of Dollars In Pre-IPO Stock Scheme

 

Damian Williams, the United States Attorney for the Southern District of New York, announced the guilty plea of SHAMOON RAFIQ, a/k/a “Shamoon Omer Rafiq,” a/k/a “Omar Rafiq,” a/k/a “Omer Rafiq,” a resident of Singapore, for engaging in a scheme in which RAFIQ solicited millions of dollars of investors’ money by falsely representing that he was offering investments in shares of stock in privately held companies that had not yet conducted an initial public offering (“pre-IPO stock”), even though in fact he did not actually have those shares to offer, by impersonating senior officials of a reputable family office investment firm, and by engaging in other acts of deception. 

U.S. Attorney Damian Williams said: “Shamoon Rafiq ran a brazen scheme from Singapore to defraud U.S. investors who wished to invest in well-known private companies before they went public.  This prosecution demonstrates the continued efforts of this office and our law enforcement partners to pursue those who defraud American investors no matter where the perpetrators are located.” 

According to the charging documents and other filings and statements made in court:

SHAMOON RAFIQ was born in the Netherlands and resided in Singapore.  RAFIQ was convicted in 2004 in the U.S. District Court for the Eastern District of New York for carrying out a wire fraud scheme in which he purported to sell pre-IPO stock in a privately held company that had not yet conducted its initial public offering when, in fact, RAFIQ did not own or have access to such stock.  After serving a 41-month federal prison sentence for that crime, RAFIQ was deported from the United States and eventually relocated to Singapore.

In or about 2020, RAFIQ engaged in a new scheme from Singapore to defraud victims into paying him millions of dollars for alleged investment interests in various pre-IPO stocks that he did not actually own or control. 

In connection with his new fraud scheme, RAFIQ fraudulently impersonated two senior officials (“Victim-1” and “Victim-2”) of a prominent family office investment firm (“FamCap”) that manages and invests assets of members of a prominent billionaire family (the “Family”).  In July 2020, RAFIQ caused the creation of a fake FamCap website (the “Fake FamCap Website”), which automatically routed users to the official FamCap website, and the creation of fake FamCap email addresses for Victim-1 and Victim-2 that closely resemble, but are slightly different from, their genuine FamCap email addresses (the “Fake FamCap Email Addresses”).  The Fake FamCap Website and Fake FamCap Email Addresses for Victim-1 and Victim-2 were created without their or FamCap’s consent.  The Fake FamCap Email Addresses also included the names of Victim-1 and Victim-2 without their authorization.

In July 2020, RAFIQ began soliciting millions of dollars from investment firms in New York and elsewhere based on false claims that in exchange for their funds, he would sell them investment interests in a purported special purpose investment vehicle called “[Fam] Capital Technology Fund, LLC” that was supposedly managed by FamCap and allegedly owned pre-IPO stock in Airbnb, Inc., among other companies.  For example, as part of this fraudulent scheme, RAFIQ deceived an investment firm based in New York, New York (the “New York Firm”), and one of the firm’s foreign institutional clients (the “Foreign Client”) into making agreements under which the Foreign Client wired about $9 million in mid-August 2020 into an escrow account in New York for anticipated release to a bank account in Singapore to pay RAFIQ for his purported sale of investment interests in the LLC.

In soliciting this $9 million investment, RAFIQ made a variety of false representations, including the following:

• RAFIQ falsely claimed that the LLC was managed by FamCap.  In fact, the LLC never existed.

• RAFIQ falsely claimed that the LLC owned pre-IPO shares of Airbnb.  In fact, the LLC did not own and could not have owned such stock because the LLC never existed.

• RAFIQ falsely claimed that Victim-1 and Victim-2 had approved of his sale of his alleged interests in the LLC.  In fact, Victim-1 and Victim-2 do not know RAFIQ and have confirmed that FamCap was never involved in or approved of any such transaction.

During and to further the goals of this fraudulent scheme, RAFIQ also caused the creation and transmission of emails from the Fake FamCap Email Addresses and fake contracts and deal documents purporting to have been signed by Victim-1 or Victim-2 on behalf of FamCap that neither of them approved.  For example, in August 2020, during the course of email communications with the New York Firm and Foreign Client concerning RAFIQ’s alleged sale to them of his purported interests in an alleged FamCap-managed LLC that supposedly held Airbnb shares, RAFIQ copied into the email chain the Fake FamCap Email Addresses to create the false impression that FamCap was involved in and approved of the alleged transaction.

Also pursuant to the fraudulent scheme, RAFIQ solicited over $1 million from an investment group located in California (the “California Group”) in late 2020 by yet again purporting to be a representative of FamCap offering pre-IPO stock for sale.  As a result, the California Group wired RAFIQ a total of approximately $1,002,615 in November and December 2020.

RAFIQ, 50, a resident of Singapore and a citizen of the Netherlands, pled guilty to a one-count Information charging him with conspiring to commit securities fraud and wire fraud, which carries a maximum potential sentence of five years in prison.  RAFIQ agreed to pay restitution and forfeiture in the amount of $1,002,615 in connection with his guilty plea.

The maximum potential prison 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 the judge. 

Mr. Williams praised the investigative work of Homeland Security Investigations, the U.S. Postal Inspection Service, the New York City Police Department, and the New York City Sheriff’s Office, and he also thanked the U.S. Securities and Exchange Commission, which conducted a separate parallel investigation, for its assistance, and the Department of Justice’s Office of International Affairs, Interpol, Singapore Police Force, and the Attorney-General’s Chambers of Singapore for their assistance in the extradition of the defendant.

This case is being handled by this Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorney Jared Lenow is in charge of the prosecution.