Former Owner And Manager Of Dubai-Based Investment Fund Found Guilty In Manhattan Federal Court Of Securities Fraud Related Offenses

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that IRFAN AMANAT, the former owner and manager of Enable Invest Ltd. (“Enable”), a Dubai-based investment fund, was found guilty yesterday in Manhattan federal court of various securities fraud-related offenses, after a trial presided over by U.S District Judge Paul G. Gardephe.  This follows the December 2017 conviction of co-defendants Omar Amanat and Kaleil Isaza Tuzman.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As the jury found, Irfan Amanat lied to auditors, investors, and the SEC about millions of dollars of KIT digital and Maiden Capital funds that were lost or misappropriated.  Irfan Amanat now awaits sentencing for his multimillion-dollar deception.”    

According to the Indictment and other filings in Manhattan federal court and the evidence presented at trial, AMANAT was engaged in two related criminal schemes:

The first scheme involved a fraud on investors in Maiden Capital LLC (“Maiden Capital”), a hedge fund based in Charlotte, North Carolina.  Stephen Maiden was the managing member of Maiden Capital.  Between in or about March 2009 and in or about June 2012, AMANAT, along with Maiden and others, devised and carried out a scheme to hide the fact that investments by Maiden Capital in Enable, an investment vehicle owned and managed by AMANAT, had been lost.  To facilitate the scheme, Maiden, with AMANAT’s assistance, generated fictitious client account statements that failed to disclose millions of dollars in Enable-related losses. 

The second scheme involved accounting fraud at KIT digital (“KITD”), a publicly traded company based in New York, New York, and Prague, Czech Republic.  From at least in or about 2009 through in or about 2012, AMANAT, along with Tuzman, KITD’s former CEO, and Robin Smyth, KITD’s former CFO, engaged in an illegal scheme to deceive KITD shareholders, members of the investing public, KITD’s independent auditors, and others concerning KITD’s true operating performance and financial results.  Instead of informing KITD’s auditors and investors that millions of dollars that KITD had invested with Enable had been lost or fraudulently misappropriated, AMANAT falsely represented that KITD’s investment with Enable was sound and earning steady interest.

Following the jury’s verdict, the government moved for AMANAT to be remanded into custody because, as alleged by the government, AMANAT attempted to obstruct justice by seeking to procure false bank documents in order to falsely demonstrate that two cooperating witnesses who testified at the trial and the 2017 trial had been paid for their testimony.  An evidentiary hearing on this issue commenced and will continue at a later date. 

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AMANAT, 46, was found guilty of one count of conspiracy to commit wire fraud, and one count of wire fraud, each of which carries a maximum penalty of 20 years in prison, and one count of aiding and abetting investment advisor fraud, and one count of conspiracy to commit securities fraud, make false statements in annual and quarterly SEC reports, and make false statements to auditors, each of which carries a maximum penalty of five years in prison. 

The maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the Court. 

Mr. Berman praised the investigative work of the Federal Bureau of Investigation and the U.S. Postal Inspection Service.  He also thanked the SEC. 

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Damian Williams, Andrea M. Griswold, and Daniel M. Tracer are in charge of the prosecution.