Sherman Donor Arrested For Ponzi Scheme
Posted by Damian Kelly on Nov 1, 2012 - 11:54:48 AM
SHERMAN OAKS—The race for the 30th Congressional District has taken a detour after one of the candidates’ donors was arrested for his role in a multi-million dollar Ponzi scheme on Tuesday, October 30.
The arrest of business owner and past Democratic party donor Syed Qaisar Madad comes with less than a week to go before voters decide whether to vote for Rep. Brad Sherman of Sherman Oaks or Rep. Howard Berman of Van Nuys.
Several reports indicate Madad, 65, who has contributed to both candidates’ campaigns in the past, was taken into custody by Federal Bureau of Investigation agents and Internal Revenue Service criminal investigation units at his home in Diamond Bar. He was arraigned on a 16-count indictment Tuesday at U.S. District Court in Los Angeles.
Syed Qaisar Madad. Photo courtesy of Pakistani Link
According to the Campaign Money website, Madad donated $4,800 in contributions to Sherman during the 2010 cycle. He also made contributions of $4,000 to Berman in 2009 and 2010.
Agents arrested Madad on federal wire fraud charges claiming he ran a scheme that took $49 million from investors who suffered losses of around $32 million.
A Ponzi scheme is defined as investments that are offered to fraudulently pay returns to its investors from their own money or the money paid by subsequent investors rather than from profits earned by the operator.
Madad, who is an immigrant from Pakistan, allegedly lied to investors saying his day-trading method would make consistent and substantial profits. He also allegedly claimed their money was safe and would be returned upon request.
His scheme came to light after he was sued by one of his investors but allegedly continued to seek money from investors to put it into his day-trading scheme. In addition, the indictment indicates Madad allegedly withdrew investors’ money in cash and used millions of dollars to pay for his personal expenses and those of his wife’s business. If convicted on all 16 counts, Madad would face a maximum sentence of 260 years in federal prison.
Madad is the CEO and co-owner of Placentia-based Technology for Telecommunication and Multimedia Inc. He has been honored by the California State Assembly and the U.S. Senate.