An Indian-born entrepreneur with ambitious goals of developing virtual world technologies has been arrested and charged by federal prosecutors in an alleged $45 million investment fraud scheme that targeted more than 10,000 people.
Deputy United States Attorney General Kenneth Polite announced on Wednesday the filing of charges in federal court in Nebraska against Neil Chandran, who owned several companies under the ViRSE banner.
The Justice Department said Chandran was arrested in Los Angeles.
The ministry added that Chandran, 50, had falsely promised investors an extremely high rate of return by claiming that a consortium of wealthy individuals, including two billionaires, were set to acquire one or more of his companies.
But there were no such buyers or billionaires and a substantial part of the funds raised from investors “were diverted for other business ventures and for the personal benefit of Chandran and others”, the Department said.
He is charged with three counts of wire fraud, which generally involves the transmission or receipt of funds in electronic transactions, and two counts of “participating in monetary transactions in goods of origin criminal”.
According to court documents, Chandran gave “false and misleading information” to one person, who has not been identified, who in turn passed it on to another.
This individual, also unnamed, “marketed the investment opportunity to thousands of current and potential investors through email updates and conference calls,” according to the court documents.
Some of the investors paid for their investments using cryptocurrency,
Companies that operated under the ViRSE banner included Free Vi Lab, Studio Vi Inc., ViDelivery Inc., ViMarket Inc., and Skalex USA Inc.
The companies “have developed virtual world technologies, including their own cryptocurrency, for use in the companies’ own metaverse,” the Justice Department added.
A website going by the name of ViRSE has been invited to “get a head start on becoming a ViRSE millionaire with our exclusive, limited edition ViRSEWare – Android devices preloaded with the beta version of the ViRSE app suite and generous token bundles ViRSE”.
He said ViRSE is “the virtual universe of people, places, and content accessible from any internet-connected device on this planet.”
The Justice Department said 39 Tesla vehicles along with about 100 different assets, including real estate and other luxury vehicles, belonging to it could be forfeited depending on the verdict in the case and that many of them are seized by the authorities.
This appears to be at least his second encounter with the law.
In 2018, he was convicted of fraud in a New York state court, according to an archived press release from the state attorney general’s office.
But, according to the statement, he was not given a prison sentence on condition that he pay $761,000 in restitution to the victims in addition to paying another $2 million in a civil suit.
His company involved in this lawsuit was called Sungame and the fraud involved the sale of 3D tablets with the promise to refund the price of $1,000, award a scholarship and generate profits from the resale of the tablets, according to the press release.
(Arul Louis can be reached at firstname.lastname@example.org and follow @arulouis)
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