A New Jersey man who is the owner of several Boston-based investment companies, was arrested Aug. 4, at Logan Airport, Boston, on charges of operating a Ponzi-like fraud scheme.
Tanmaya Kabra, 25, who resided most recently in Weehawken, N.J., was charged in a criminal complaint unsealed Aug. 5, with wire fraud and bank fraud.
The details contained in the charging documents are allegations, the press release from the Justice Department, U.S. Attorney’s Office for the District of Massachusetts, noted. Kabra is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
According to the criminal complaint, Kabra allegedly conducted business through a company called LaunchByte.IO LLC and several affiliated companies. He held himself out to investors as a successful serial entrepreneur, venture capitalist, and angel investor in start-up companies. Offering lucrative and low or no-risk returns on investments, Kabra allegedly lured investors with representations that their funds would be used to foster the growth and development of start-up companies, to prepare those companies for sale, or for other legitimate business opportunities, the complaint said. In reality, the criminal complaint says, Kabra used the money that he received from investors to allegedly pay off existing debts to prior investors in his scheme and to fund his lavish personal expenses.
The charge of wire fraud provides for a maximum sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. The charge of bank fraud provides for a sentence of up to 30 years in prison, three years of supervised release and a fine of $1 million or twice the gross gain or loss, whichever is greater.