Introduction to the Alleged Ponzi Scheme
A Harvard Business School graduate was arrested Thursday on fraud charges alleging he swindled fellow alumni of the prestigious school out of over $4 million in a Ponzi scheme, even assuring one investor they would soon “brag” about their “crazy gains” at the school’s reunion.
The Arrest and Charges
Vladimir Artamonov, 46, was taken into custody in Elkridge, Maryland, where he lived, and was charged with securities, wire and investment adviser fraud for allegedly carrying out the scheme from September 2021 through February 2024.
The Allegations
An indictment unsealed in Manhattan federal court said Artamonov promised big returns and little risk to dupe former classmates and other alumni into investing with him, telling one investor: “It will be your best investment. The insight is air tight.”
Response from Harvard and Artamonov’s Lawyer
Messages for comment left with Harvard and a lawyer for Artamonov were not immediately returned. Artamonov, appearing before a magistrate judge in federal court in Maryland, was released on $300,000 bail with instructions to have no contact with victims or potential trial witnesses.
Initial Revelation of the Allegations
The allegations against Artamonov were first revealed in late February 2024 by New York Attorney General Letitia James, who said in a news release then that her office learned about the fraud after one of several dozen investors ended his own life after learning he had lost $100,000.
Statement from New York Attorney General
“Even sophisticated investors can be conned by fraudsters, especially when personal relationships and networks are used to build a false sense of trust,” James said. She said Artamonov “used his alumnus status from Harvard Business School to prey on his classmates and others while seeming legitimate and dependable.”
Method of Operation
Artamonov, a 2003 Harvard graduate with a master’s in business administration, used the school’s alumni network to identify investors, authorities said. The indictment said he promised investors that he could identify securities on the verge of making large gains by spotting public insurance company filings by affiliates of Berkshire Hathaway Inc. prior to public filings made to the Securities and Exchange Commission that are more closely followed by investors.
Actual Use of Investor Funds
Instead of following that plan, Artamonov put investor money into risky short-term options, losing millions of dollars, often within days of receiving the money from investors, the indictment said. It said he repeatedly assured investors that big profits were on the horizon and even promised one investor that it was “almost certain we will make a ton of money” soon and that they would “brag” about their “crazy gains” at the Harvard Business School reunion.
Return of Investor Funds
Investors eventually demanded their money back, causing Artamonov to return less than $400,000 by paying original investors with money from new investors or by declining to reimburse them at all, the indictment said. It said Artamonov lost most of the money or spent tens of thousands of dollars on items such as lodging, food and alcohol, and transportation.
Statements from Authorities
Christopher G. Raia, head of New York’s FBI office, said in a news release that Artamonov “exploited the prestige of a well-respected university and investment company to unlawfully procure investments, which he used to pay for personal expenses.” U.S. Attorney Jay Clayton said Artamonov “betrayed investors, including friends and former Ivy League classmates.”
Conclusion
The alleged Ponzi scheme carried out by Vladimir Artamonov highlights the importance of due diligence and skepticism when investing, even when the investment opportunity comes from someone with a prestigious background or affiliation. It also underscores the need for regulatory bodies and law enforcement to remain vigilant in protecting investors from fraudulent activities.
FAQs
- What is the nature of the charges against Vladimir Artamonov?
- Artamonov is charged with securities, wire, and investment adviser fraud.
- How much money is alleged to have been swindled from investors?
- Over $4 million.
- What was the method used by Artamonov to identify potential investors?
- He used the Harvard Business School alumni network.
- What did Artamonov promise investors regarding the potential gains of their investments?
- He promised big returns with little risk.
- What actually happened to the money invested with Artamonov?
- The money was put into risky short-term options, resulting in significant losses, and some was used for personal expenses.
