Two Indian-origin men have been charged over financial fraud in Brooklyn.
A company founded in 2010 and dissolved in 2025 had been defrauding investors and shareholders through false revenue figures and fake contracts. Two Indian-origin men have been charged with this elaborate financial scam surrounding iLearning, a Maryland-based technology company that marketed itself as an “out-of-the-box AI platform”. Puthugramam “Harish” Chidambaran, the founder and former Chief Executive Officer, and Sayyed Farhan Ali “Farhan” Naqvi, iLearning’s former Chief Financial Officer were arrested on April 17 and were presented in the court. The court documents said that they exploited the investor excitement over the AI boom and told their investors and lenders lies, inflated figures. The truly artificial part of their story was their customers and revenues, United States Attorney Nocella said.
Company’s growth story
Founded in 2010, iLearning claimed to earn revenue primarily by selling licenses for its platforms to customers, and the company reported rapidly growing revenues that reached $421 million in 2023. In April 2024, iLearning became a publicly traded company and obtained $40 million in loan proceeds from the New York City branch of a financial institution. The company then obtained an additional $20 million in loan proceeds from another New York City branch of a financial institution. Following its going-public transaction, iLearning’s shares began trading on the NASDAQ under the ticker symbol “AILE,” and the company quickly achieved a market capitalization of approximately $1.5 billion.
Fake information, false contracts
The investors and lenders did not know that the company fabricated all its revenues. The agreements that they showed were mostly signed by family members. The court document cited an example of the intricate fraud. At Chidambaran’s direction, an associate who previously worked as an iLearning vice president, incorporated and opened bank accounts in the names of several purported iLearning customers. The two main accused transmitted millions of dollars from iLearning to an account controlled by this individual. This individual then sent those funds to other accounts he controlled in the names of other entities, before ultimately sending the money back to iLearning. The aggregate value of these round-trip transactions exceeded $144 million.In 2024, an investment research firm caught the fraud and published a report that iLearning misrepresented its revenue, leading to a rapid stock price decline. iLearning ultimately filed for Chapter 11 bankruptcy protection in the District of Delaware in December 2024, and the proceedings were later converted to a Chapter 7 liquidation in 2025, marking the collapse of the company.
