Two Indian-origin executives have been charged in the United States for allegedly running a large-scale financial fraud linked to an artificial intelligence platform, raising serious concerns about misuse of emerging tech.
The accused — Puthugramam “Harish” Chidambaran and Sayyed Farhan Ali Naqvi — were arrested in connection with the case and produced before a federal court in Brooklyn. They were previously the CEO and CFO of iLearning, a Maryland-based tech firm that marketed itself as an innovative AI-driven platform.
According to prosecutors, the duo allegedly misled investors and shareholders by fabricating financial data, including fake contracts and inflated revenue figures.
Investigators claim that a major portion of the company’s reported earnings was not real but created through manipulated transactions.
The company, founded in 2010, projected rapid growth and even went public, reaching a significant market valuation before doubts were raised about its financials.
A closer probe revealed that many of its customer relationships and revenue streams were either exaggerated or entirely fabricated.
Authorities allege that the executives used forged agreements and “round-tripping” of funds — where money was circulated between entities to simulate real business activity — to create an illusion of growth and profitability.
The scam eventually led to the company’s collapse, with iLearning filing for bankruptcy after the fraud came to light.
Both executives now face multiple charges, including fraud and conspiracy. If convicted, they could face severe penalties, with some charges carrying the possibility of long-term imprisonment.
Officials say the case highlights how advanced technologies like AI are increasingly being used as a cover to attract investors, making due diligence even more critical.
The incident has once again exposed vulnerabilities in the startup ecosystem, where hype around emerging technologies can sometimes overshadow transparency and accountability.