Saudi student sues Californian professor over $88m fraud

Economics student claims the academic used a fake equity fund to swindle him of his father’s money

A Saudi student is suing his former professor at a Californian university for $88m, claiming he was defrauded in an investment scam.

Jaralla Al Jaralla claims his trust was exploited when he developed a mentor-mentee relationship with Ayman Kandeel, an Egyptian economics professor at the University of Southern California, according to court documents published on the Courthouse News Service.

Al Jaralla claims Kandeel said he had a private equity fund that catered to wealthy investors and convinced him to invest $88m of his father’s money, promising a 20 percent rate of return.

Kandeel allegedly said 80 percent of the investments would be fixed income-assets in the US and they would be managed by professionals.

"The entire investment, however, was a classic scam,” the 23-page complaint lodged with the court says.

“Jarallah was shown impressive looking business plans and a prospectus, from time to time was given financial statements for the investment and was provided opportunities to invest in what appeared to be very lucrative investments.

“Dr. Kandeel, along with his accomplice [defendant Kirkwood James] strung Jarallah and his father along for several years with assurances that nothing was wrong and the investments were doing just fine.

"The reality, however, is that the companies in which the fund invested are fake, and the money is gone.”

Al Jaralla claims Kandeel and Drew also attempted to persuade him to invest another $25m, but when he asked for financial statements in January, 2013, Kandeel admitted there were no assets.

He is suing the professor, Drew and companies formed to facilitate the fraud for $88m, plus interest, damages and costs.

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

NOTE: Comments posted on arabianbusiness.com may be printed in the magazine Arabian Business

Please post responsibly. Commenter Rules

Posted by: Biffer Bob

What sort of 'private equity' fund invests 80% into fixed-income assets?! Surely alarm bells must have been ringing at that point. Sounds like this mug deserved to get scammed.

All comments are subject to approval before appearing

Further reading

Features & Analysis
Saudi Arabia spends money to make money

Saudi Arabia spends money to make money

Tour of Asia by Saudi Arabia's King Salman advances drive to...

Soft money: will cash transactions soon be a thing of the past?

Soft money: will cash transactions soon be a thing of the past?

The rapid digitisation of banking in the UAE is enabling robots...

Oman gains breathing space with jumbo $5bn bond sale

Oman gains breathing space with jumbo $5bn bond sale

Order books for the issue totalled $20bn, showing that Oman can...

Most Discussed
sponsoredTracking