NORTH ARLINGTON –
A 23-year-old North Arlington man was to appear last week in Newark Federal Court to face charges that he fraudulently obtained hundreds of thousands of dollars from investors prior to high-profile initial public offerings (IPOs) and then used the funds for lavish personal expenses, U.S. Attorney Paul J. Fishman reported.
The defendant, Omar Hafez, is accused of one count of wire fraud conspiracy, an offense that carries a maximum penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the crime.
According to the complaint unsealed Dec. 8, Hafez and others solicited funds from investors from July 2014 to December 2015, purportedly to purchase shares of various companies prior to their IPOs.
Citing one example of the alleged fraud, Fishman’s office said Hafez told a potential investor that he had access to pre-IPO shares of high-profile companies, including a cloud communications business, the shares of which would increase significantly following its IPO. That investor reportedly sent Hafez a $100,000 check to purchase shares.
That same investor later sent Hafez a wire in the amount of approximately $300,000 for shares in another business — an internet domain registrar and web hosting company, authorities said.
None of the approximately $400,000 provided by the victim was used to buy shares in any pre-IPO company, authorities said. Instead, Hafez and other alleged conspirators used the money for personal expenses, including an $87,000 purchase at a luxury car dealership, as well as about $100,000 in cash withdrawals, authorities said.
According to Hoffman, the alleged conspirators had operated the scheme through a number of entities they had created, including but not limited to:
Lotus Global Wealth Management, Lotus Wealth Management, Lotus Global Capital Investments Corp., Lotus Global Capital Partners LLC, Lotus Global LLC, Lotus Global Property Management Corp., Lotus Global Holdings LLC (collectively the “Lotus Global Entities”) and O.P.I. Wealth Management Corp.
Hafez reputedly claimed to be the CEO of the Lotus Global Entities.
He was arrested Dec. 7 by FBI special agents and U.S. Postal inspectors.
Anyone who believes they are a victim of — or otherwise has information concerning — this alleged scheme was asked to contact the FBI at 973-792- 3000.
— Karen Zautyk
