Fraudster who peddled fake pre-IPO Airbnb stock falsely claimed to represent Egypt's Mansour family

The Airbnb emblem is displayed on the Nasdaq digital billboard in Times Square in New York on December 10, 2020.

Kena Betancur | AFP | Getty Images

When prosecutors introduced the plea deal late final week of Shamoon Rafiq, who ran a $10 million scheme that duped buyers into shopping for into pre-IPO tech corporations like Airbnb, they mentioned the defendant was masquerading as a consultant of a outstanding household workplace.

The household workplace just isn’t named within the criticism, however particulars from courtroom filings and on-line information match these of Man Capital, the household workplace of the Mansour household. Man Capital was began in 2010 by billionaire Mohamed Mansour, considered one of three brothers behind Egypt’s second largest firm, and his son, Loutfy Mansour. 

Rafiq had no connection to Man Capital or mother or father firm Mansour Group. The conglomerate was based in 1952 as a cotton exporter and has since grown to turn out to be one of many world’s largest General Motors sellers and a serious Caterpillar distributor.

A spokesman for Man Capital declined to remark to CNBC, as did the Manhattan U.S. Attorney’s Office, which is prosecuting Rafiq.

Rafiq, 50, pleaded responsible Thursday to at least one depend of conspiracy to commit securities fraud and wire fraud. He faces a most attainable sentence of 5 years in jail.

The U.S. lawyer’s workplace mentioned Rafiq, who was beforehand convicted in 2001 of an analogous crime, ran a “brazen scheme” from Singapore in 2020, defrauding U.S. buyers at a time when tech IPOs have been hitting the market at report ranges and peak valuations.

In the summer time of that 12 months, Rafiq allegedly created created pretend domains and e-mail addresses masquerading as a senior government on the household workplace. 

Mohamed Mansour, president of Mansour Group, poses for {a photograph} following a Bloomberg Television interview in London, U.Okay., on Thursday, Feb. 11, 2016. 

Simon Dawson | Bloomberg | Getty Images

Prosecutors say Rafiq pretended to be an in depth affiliate of the CEO of the household workplace, who was described as Victim-1, and impersonated one other household workplace government, recognized as Victim-2.

CNBC was capable of establish Man Capital because the unnamed household workplace by way of a sequence of particulars within the prosecutor’s criticism, together with partial domains and web site particulars that precisely matched Man’s on-line presence.

Loutfy Mansour’s title and tenure additionally match the title and tenure of the unidentified Victim-1 within the criticism. The Mansour household publicly launched its household workplace in 2020, and disclosed its stakes in Airbnb and different expertise corporations.

Rafiq started methodically pitching boutique funding banks and institutional buyers in 2020, a 12 months that featured blockbuster IPOs from tech corporations together with Snowflake, Unity Software and DoorDash, along with Airbnb. Rafiq was claiming he had entry to shares of pre-IPO corporations, a probably profitable alternative given how a lot shares might pop once they hit the general public market.

In July 2020, an unnamed boutique funding financial institution in New York was launched to Rafiq by way of one other enterprise affiliate of a companion on the financial institution. Rafiq presupposed to be an in depth buddy of the household workplace’s CEO, and was providing to promote $9 million value of Airbnb Series C shares. The shares did not exist.

Airbnb had introduced plans to go public in 2019, however the Covid pandemic delayed its debut. Shortly after Rafiq first spoke with the funding financial institution, in August 2020, reviews surfaced of Airbnb’s plan to confidentially file for an IPO. Four days after these reviews, the unnamed funding financial institution agreed to purchase the fictional shares and wired $9 million to an escrow account.

Airbnb in the end held its IPO in December and noticed its inventory rocket 112% in its opening day.

Prosecutors first introduced prices of securities fraud, wire fraud and id theft towards Rafiq in 2021. He’d dedicated virtually the identical crime 20 years earlier, when he was convicted for attempting to promote pre-IPO shares of Google.  

Inner City Press, a information outlet that covers the Southern District of New York, first reported that Rafiq had been detained in January, following his extradition from Singapore.

“Shamoon Rafiq exploited investors’ fear of missing out on the potential gains to be earned from investing in companies before they go public, and solicited millions of dollars from investors through brazen lies and deception,” U.S. Attorney Audrey Strauss mentioned in an announcement on the time of the 2021 cost.

The financial institution froze the $9 million in escrow funds and contacted the unnamed household workplace by way of a “trusted intermediary,” in keeping with prosecutors. The household workplace’s authorized counsel reported the scheme to regulation enforcement shortly after it was knowledgeable, in keeping with the criticism.

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