AUSTIN (KXAN) — An Austin man is facing 41 months — or three years and five months — in prison for his involvement in a Ponzi scheme that defrauded multiple investors of more than $1.5 million, according to the U.S. Department of Justice.
A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors, according to Investor.gov.
According to the DOJ, Nurnepes Nurjanov, 34, pleaded guilty in June to one count of wire fraud. In addition to the prison sentence, he was ordered to pay $1,505,500 in restitution.
The DOJ said in a press release that court documents revealed Nurjanov, an informal day trader, in Sept. 2019 started "soliciting funds from investors, drafting agreements that promised minimum returns, the split on profits between him and his investors, and investor access to the trading accounts."
Nurjanov also promised to use investment funds only for stock trades and agreed to pay “50% of clean profit” to the investor, according to the release. Nurjanov created false documents indicating favorable investment returns and used a trading simulator template to show potential investors alleged gains he was making to entice them, the DOJ said.
According to the DOJ, one invested $50,000 in Oct. 2019 and was shown a fraudulent investment statement reflecting a significant return.
The DOJ's release said another investor provided $50,000 in Dec. 2020 and then $142,500 in Feb. 2021, and several other large investments over the next several months before selling their business in June 2022 and investing the proceeds of $325,000 with Nurjanov.
That investor referred a friend to Nurjanov, who was convinced by "multiple false statements" to wire $200,000 to Nurjanov, the release said.
While they did receive alleged investment returns, the funds were proceeds from money invested by other victims of Nurjanov’s scheme, according to the DOJ.
In total, the DOJ said Nurjanov defrauded victims of $1,524,500. He had also spent portions of the money and assets on his personal living expenses, according to the DOJ.
