There are new allegations for Syed Arbab, the 25 year-old former University of Georgia student who pleaded guilty three years ago to running an illegal Ponzi scheme from a frat house in Athens. A federal lawsuit says he’s been involved in another scam, making more than $2 million in fictitious deposits from empty or underfunded bank accounts into trading accounts at two brokerages. The lawsuit says ran this scam from a federal prison in Marion Indiana, where he is serving a five-year prison sentence for his previous conviction.
From the AJC…
Those deposits allegedly provided the defendants with more than $1.5 million in instant credits to use for stock trades. They then “withdrew or attempted to withdraw trading profits before the broker-dealers discovered the insufficient funds and froze the accounts,” the lawsuit said.
Arbab and his co-defendants reaped gains of less than $8,000, but their unfunded or underfunded trades resulted collectively in nearly $150,000 in losses to the brokerages, the complaint said.
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