Fugitive Connecticut fund manager Iftikar Ali Ahmed indicted in $54 million scam

Ahmed worked for Oak Investment Partners.

AB Wire

Iftikar Ali Ahmed, aka Ifty, 44, a former general partner with the private equity firm Oak Investment Partners, who has been on the lam for over a year, has been indicted in federal court in Boston with wire fraud charges and making false statements on income tax returns, in connection with a $54 million embezzlement scam.

Ahmed, an Indian American, was indicted Wednesday in U.S. District Court in Boston on four counts of wire fraud and three counts of making false statements on income tax returns. Ahmed was charged in a separate scheme in April 2015, and fled the country while on pre-trial release.

The indictment alleges that between 2004 and April 2015, Ahmed embezzled more than $54 million from the private equity firm for which he worked as a general partner and fund manager, reported Greenwich Time.

The indictment further alleges that Ahmed used the proceeds of his fraud to purchase a $9.6 million residence in Greenwich and a luxury condominium in New York for approximately $8.6 million.

According to U.S. Attorney Carmen M. Ortiz said, “Ahmed embezzled the money through an elaborate scheme to defraud in which he submitted false invoices, substantially overstated the prices of international business deals he orchestrated on behalf of his employer, and by setting up fraudulent bank accounts in the name of the private equity firm for which he worked and the companies in which his employer invested.”

On one occasion in November 2014, it is alleged that Ahmed recommended to his private equity firm that it invest $20 million in an international company and justified the price by submitting fraudulent financial documents. At the same time, Ahmed informed the international company that his employer had agreed to purchase shares for $2 million.

The indictment alleges that Ahmed then directed the private equity firm to wire $2 million to another company and the remaining $18 million to an account that Ahmed falsely claimed was the company’s account, but actually belonged to Ahmed.

On Jan. 12, 2015, Ahmed transferred the $18 million in fraud proceeds to his spouse and a portion of these funds was used to purchase a luxury condominium in New York City, according to the indictment, reported Greenwich Time.

In May 2015, the SEC obtained a court order freezing $55,089,446 million of Ahmed’s assets.

According to the SEC’s complaint, Ahmed had Oak funds pay $20 million for a $2 million stake in an Asian e-commerce joint venture in December 2014, pocketing the $18 million difference for himself. It alleges that in another investment in August 2014, an Oak fund overpaid for shares in a China-based e-commerce company, allowing Ahmed to pocket $2 million.

In a third transaction, the complaint alleges that in 2013, Ahmed advised an Oak fund to invest $25 million in a U.S.-based e-commerce company without disclosing his interest in I-Cubed Domains LLC, which had a significant stake in the same company. The following year, at Ahmed’s advice, the Oak fund paid $7.5 million to I-Cubed to buy shares in the company that I-Cubed had acquired for $2 million. The complaint alleges that Ahmed again failed to disclose his ties to I-Cubed, violating his duty to act in the best interest of the Oak fund investors and avoid self-dealing.

According to Bloomberg, Ahmed received an MBA from Harvard Business School in 1999 and an undergraduate degree in Engineering from the Indian Institute of Technology in New Delhi in 1993. He also worked for three years with Fidelity Ventures as senior associate, and at Goldman Sachs.