Securities Law News

UGA Grad’s Frat House Ponzi Scheme Leads to Fraud Guilty Plea

Oct. 11, 2019, 7:23 PM

A Georgia man pleaded guilty to running a $1 million Ponzi scheme from his fraternity house while a student at the University of Georgia, DOJ said Oct. 11.

Syed Arham Arbab pleaded guilty to securities fraud in the U.S. District Court for the Middle District of Georgia, the Justice Department said. He faces an ongoing Securities and Exchange Commission suit in the same court.

Arbab admitted that he falsely promised investors—including fellow UGA students—returns as high as 56%, DOJ said. He also acknowledged that he claimed a UGA football alum who went on to play in the NFL had invested with him in order to convince football fans to trust him with their money.

Arbab claimed to be an MBA candidate, but had actually applied to and been rejected by UGA’s graduate program, DOJ said. He admitted he used investor funds to cover alcohol purchases, gambling during three trips to Las Vegas, and “adult entertainment.”

His sentencing is scheduled for January 2020.

Crowder Stewart LLP represented Arbab in the criminal case, according to the docket. Newport, R.I.-based Robert D. Loventhal represents Arbab in the civil case.

The cases are United States v. Arbab, M.D. Ga., No. 19-cr-00051, guilty plea announced 10/11/19 and SEC v. Arbab, M.D. Ga., No. 19-cv-00055, complaint filed 5/31/19.

To contact the reporter on this story: Jennifer Bennett in Washington at jbennett@bloomberglaw.com

To contact the editors responsible for this story: Jo-el J. Meyer at jmeyer@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com

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