Mina Tadrus, the founder of a hedge fund called Tadrus Capital LLC, has admitted to a serious crime involving investment adviser fraud. The 38-year-old from Tampa, Florida, was in a federal courthouse in Brooklyn, New York, earlier today, where he pled guilty to a scheme that deceived investors out of more than $5 million. This case is a major example of how some people use fake promises to trick others into trusting them with their money.
The guilty plea took place before Judge Hector Gonzalez, who is overseeing the case. Tadrus now faces up to five years in prison when he is sentenced. His actions were discovered after an investigation by the FBI and the IRS Criminal Investigation division.
False Promises to the Egyptian-American Coptic Community
Tadrus targeted the Egyptian-American Coptic Christian community with false promises. He convinced people that his hedge fund used advanced technology—specifically artificial intelligence (AI)—to make trading decisions. He promised investors that they would receive annual returns of 30% or more, which sounds like an excellent opportunity. However, these promises were far from the truth.
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Instead of using AI to make smart investments, Tadrus never used the money to trade at all. In fact, he didn’t do any trading at all. The so-called hedge fund was a complete scam, and the money given by investors was spent on things that had nothing to do with investing. Tadrus spent the funds on luxury items like expensive gifts for himself, lavish meals, and even to pay off earlier investors in a Ponzi-like scheme.
How Tadrus Spent the Investors’ Money
The way Tadrus handled the investors’ funds reveals how fraudulent the whole operation was. Court documents and statements made during the court proceeding show that, instead of making smart investments, he used the money for his own luxury lifestyle. This included buying high-end gifts, paying for expensive meals, and even treating himself to things that had no connection to the business he claimed to run.
What made this situation worse was that he used new investors’ money to pay off older investors, a common tactic seen in Ponzi schemes. By doing this, he created the illusion that his fake hedge fund was successful, which encouraged even more people to invest. The truth, however, was that no real investment strategy was in place, and all the money was going into Tadrus’s own pockets.
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In total, Tadrus defrauded more than $5 million from unsuspecting investors. Many of his victims were members of the Egyptian-American Coptic Christian community, who trusted him because of the promises he made. Unfortunately, Tadrus took advantage of that trust for his own personal gain.
Cooperation of Law Enforcement and Next Steps
The guilty plea marks a significant step forward in the legal process, with Tadrus agreeing to forfeit some of his assets, though many of his victims are still seeking justice. The government is working hard to ensure that individuals like Tadrus are held accountable for their actions.
The case has attracted attention from law enforcement agencies such as the FBI and the IRS Criminal Investigation division, as well as the U.S. Securities and Exchange Commission’s New York Regional Office. These agencies worked together to uncover the truth behind Tadrus’s actions and help bring the case to court.
Tadrus’s sentencing is set to take place later, where he could face up to five years behind bars. This case serves as a reminder that anyone promising large returns on investments should be closely scrutinized, especially if the promises sound too good to be true.
