US-based Indian-origin tech entrepreneur Neil Chandran has been arrested for defrauding over 10,000 people in an alleged investment scheme that stole over $45 million.
The Department of Justice said he was arrested in Los Angeles on Wednesday.
The Las Vegas-based businessman owned a group of companies -Free Vi Lab, Studio Vi Inc., ViDelivery Inc, ViMarket Inc, and Skalex USA Inc - that developed virtual-world technologies. He also created a cryptocurrency for the companies to use in their metaverse.
According to the indictment, he used the companies in a scheme and falsely promised investors extremely high returns. He told them that one or more of his companies that operated under the banner of ViRSE was about to be acquired by a consortium of wealthy buyers.
He is accused of making materially false and misleading representations to investors. However, there was no such buyer group. Chandran also used a substantial portion of the funds for personal benefit and other business ventures. The indictment states that he bought luxury cars and real estate.
The Department of Justice is charged with three counts of wire fraud and two counts of engaging in monetary transactions in the criminally derived property. He is facing up to 20 years in prison for each of the wire fraud counts and up to 10 years in prison for each count of engaging in unlawful monetary transactions.
100 different assets belonging to Chandran including bank accounts, real estate, and luxury vehicles (including 39 Tesla vehicles) are subject to forfeiture as proceeds of the fraud. US Marshals and the FBI are seizing most of the assets.