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Feds slap cuffs on Google stock scammer
Victims taken for an IPO ride
The FBI has arrested a Dutch man in connection with a $2.8m stock fraud. Shamoon Rafiq, who has been living in New York City since October 2003, sold non-existent Google stock prior to the company's impending IPO.
Rafiq told his victims he was a limited partner of prominent venture capital firm Kleiner, Perkins, Caufield & Byers. He falsely claimed to be involved with what he said were "the ongoing efforts of Google to execute an IPO".
Google is to engage in an IPO later this year, with a rumoured $15bn-plus market cap, but it is not raising capital at this time. However, Rafiq said that he could purchase "Series B Preferred Stock" which had been issued to Google "friends and family" in advance of the IPO.
Rafiq was a BT employee based in Amsterdam, but was transferred to New York. Immediately after arrival, he opened several bank accounts. Between November 2003 and February 2004, his victims deposited more than $500,000 in New York and Europe. When the victims were unable to provide full payment for the stock, Rafiq offered to loan them the additional funds.
Among the victims were several financially successful and sophisticated members of the international technology and business community, the FBI says. These include a New York investment banker, the chairman of a global telecom company, a brokerage firm executive and counsel for a telecommunications company.
Rafiq allegedly used the money to support a lavish lifestyle in New York, California and the Netherlands. If convicted, he faces a maximum sentence of 30 years imprisonment and a $1m fine. ®