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One victim lost $400,000, some of which 23-year-old Omar Hafez used to buy an $87,000 luxury car, authorities allege.
From July 2014 until his arrest this morning, Hafez
and the unidentified co-conspirators solicited money "purportedly to be invested in shares of various companies" prior to Initial Public Offerings, an FBI complaint on file in Newark says.
One was supposed to be a cloud communications company, the complaint says. Articles about the purported IPO were published by the Wall Street Journal and other media -- although no date had been set, it says.
The other IPO was to be for an Internet domain registrar/hosting company. It's IPO, as well, was "widely covered by the media," the complaint says.
Instead of investing the hundreds of thousands of dollars they received in those companies, Hafez and others used it "for their own use and benefit," it says.
The bogus companies included: Lotus Global Wealth Management, Lotus Wealth Management, Lotus Global Capital Investments Corporation, Lotus Global Capital Parners LLC.
Hafez "held himself out to be the Chief Executive Officer of Lotus Global Entities," the complaint alleges. He was also listed the registered agent, it says.
However, neither Hafez nor Lotus Global Entities was registered with the Financial Regulating Authority -- prohibing either from selling securities to the public, FBI Special Agent Karl Ubellacker wrote in the complaint.
The complaint notifies Hafez that the government is looking to recover any or all of the money.
Hafez, meanwhile, was scheduled for a Tuesday afternoon initial appearance in U.S. District Court in Newark, U.S. Attorney Paul J. Fishman said.
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