Founder of AI-driven hedge fund accused of multi-million dollar fraud

September 11, 2023 Rob Abruzzese

U.S. Attorney Breon Peace announced the sentencing of a 30-year-old from South Carolina, who was found guilty of selling guns in New York City.
Photo: Nathan Howard/AP

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The promise of a new frontier in finance, a hedge fund powered by the prowess of artificial intelligence, lured unsuspecting investors and delivered a tale of deceit.

The founder and CEO of Tadrus Capital, LLC, Mina Tadrus, has been charged with wire fraud in what appears to be a disturbing trend of old crimes dressed in new technological clothing.

Late last week, a criminal complaint, unsealed in federal court in Brooklyn, detailed the alleged actions of Mr. Tadrus, who was arrested Monday morning in Tampa, Florida. Following his arrest, Tadrus made an appearance in federal court in the Middle District of Florida, securing his release on a $100,000 bond.

The 36-year-old former registered stockbroker stands accused of exploiting the Egyptian American Coptic Christian community. He is alleged to have promised them annual returns of 30% or more through Tadrus Capital’s purported AI-powered trading strategies.

The charges draw a damning portrait of Tadrus: A charismatic figure who gained the trust of potential investors at a Coptic Christian Church in Brooklyn, promising them high returns on investments driven by advanced artificial intelligence. However, in reality, it seems the cutting-edge AI element was nothing more than smoke and mirrors.

According to U.S. Attorney for the Eastern District of New York Breon Peace, “Tadrus preyed on the community with a scheme built on false promises. He never invested a dime and used new investor funds to line his own pockets.”

Allegations point to a grim reality where, instead of employing groundbreaking AI to trade, Tadrus is accused of misappropriating at least $5 million. These funds, rather than being invested as promised, were allegedly used for his personal luxuries and to pay fake “returns” to fresh investors.

The charges are currently allegations. If found guilty, Tadrus faces a penalty of up to 20 years in prison.

The proceedings will be managed by the office’s Business and Securities Fraud Section, with Assistant U.S. Attorneys Genny Ngai and John O. Enright spearheading the prosecution.