Alleged Ponzi scheme had unusual hook for investors -- religion
The indictment alleges Sunrise Equities sought investments from Muslims by claiming to provide monthly payments from profits -- not interest. Investors were promised returns of between 15 to 30 percent.
But the indictment charges the owners didn’t actually profit from real estate development. Instead, they allegedly sold promissory notes; in effect they took money from new investors to make payments to earlier ones. In addition, they allegedly made false statements to banks to secure more financing.
Assistant U.S. Attorney Sunil Harjani says Sunrise Equities allegedly defrauded more than 300 Muslim investors, who lost about $30 million. Three banks lost nearly $14 million more.
Harjani says this is the first alleged fraud scheme in
“These individuals were targeted because they were looking for investments that were Shariah compliant and upheld the principles they believed in,” Harjani said.
Two of the defendants, Salman Ibrahim and Mohammad Akbar Zahid, are charged with various counts of mail, bank and wire fraud, as well as making false statements to financial institutions. They allegedly fled the country after the company collapsed.
The third man, Amjed Mahmood, of
The defendants allegedly used some of the money for other projects, including a motorcycle parts manufacturer, a gas station and a medical equipment sales company.
The indictment claims Ibrahim also used the money to buy a plot of land for a home, to lease cars and operate an Islamic school to boost his reputation in the community. Zahid allegedly renovated his personal residence, while Mahmood is accused of making mortgage payments on his condo.
Prosecutor Sunil Harjani said the investigation reinforces that it’s important to be cautious when investing, and watch for red flags like the promise of returns that seem too good to be true.