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.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.