LOS ANGELES – A Canadian national was sentenced today to 87 months in federal prison for running a $7.5 million Ponzi scheme in which he defrauded investors by posing as a successful beverage entrepreneur with close ties to well-known business executives and professional sports stars, including NBA star Stephen Curry.

          Khemraj Dave Hardat, 50, a former resident of the Ritz-Carlton Residences at L.A. Live in downtown Los Angeles who has been in federal custody since his arrest last November, was sentenced by United States District Judge Dale S. Fischer, who said Hardat was “not a misguided businessman; he was a very skillful fraudster.”

          Hardat was sentenced after pleading guilty on April 22 to five counts of wire fraud. When he pleaded guilty, Hardat admitted that, from August 2014 through November 2018, he raised money from investors by falsely holding himself out as a successful investor and businessman in the performance beverage and water-bottling industries. Hardat duped his investors by falsely representing that he had a doctorate and that he maintained relationships with established business figures such as computer entrepreneur Michael Dell and the chief executive officer of PepsiCo.

          Hardat falsely claimed that professional basketball star Stephen Curry would be endorsing one of his company’s products, and that PepsiCo and Dr. Pepper Snapple Group, Inc. owed him more than $100 million as the result of purported business deals he had consummated with them.

          Hardat supported his bogus claims of financial success by showing victims doctored digital images of bank account statements showing inflated balances. One fraudulent image emailed to a victim showed a balance of nearly $500 million in one bank account, while another phony image showed a bank account balance of nearly $170 million.

          In reality, Hardat used investor funds to pay off his personal debts, purchase luxury cars worth more than $100,000 each, pay rent at the Ritz-Carlton Residences, pay tuition to exclusive private schools, and purchase luxury boxes and tickets for sporting and entertainment events. Hardat also admitted that, in the style of a Ponzi scheme, he made payments to prior victim-investors out of subsequent victim-investors’ money. During the course of the scheme, Hardat took in approximately $7.5 million from investors, who suffered losses of more than $6.4 million.

          “Fleeing the fallout and escaping the consequences of frauds he perpetrated in Canada, defendant immigrated to the United States, where he overstayed his visa and reconstituted his lucrative, luxurious life of financial crime,” prosecutors wrote in a sentencing memorandum. “[Hardat] befriended neighbors, fellow parents at his children’s school, and entrepreneurial would-be co-venturers, whose trust, loyalty, and hopes he carefully nurtured, only to betray them at the earliest opportunity.”

          This matter was investigated by the Federal Bureau of Investigation.

          This case was prosecuted by Assistant United States Attorney Adam P. Schleifer of the Major Frauds Section.

          LOS ANGELES – A Canadian national pleaded guilty today to five wire fraud charges for defrauding investors in a $5 million Ponzi scheme in which he pretended to be a successful beverage entrepreneur with close ties to well-known business executives and NBA stars such as Stephen Curry and Shaquille O’Neal.

          Khemraj Dave Hardat, 50, a former resident of the Ritz-Carlton Residences at L.A. Live in downtown Los Angeles, entered his plea before United States District Judge Dale S. Fischer, who scheduled an August 12 sentencing hearing. As a result of today’s guilty pleas, Hardat faces a statutory maximum sentence of 100 years in prison.

          In a plea agreement filed in United States District Court, Hardat admitted that, from August 2014 through November 2018, he falsely held himself out as a successful investor and businessman in the performance beverage and water-bottling industries. Hardat duped his investors by falsely representing that he had advanced educational degrees – including a Ph.D. – and that he maintained relationships with established business figures such as computer entrepreneur Michael Dell and the chief executive officer of PepsiCo.

          Hardat also falsely represented that Basketball Hall of Famer Shaquille O’Neal was one of his business partners, and that professional basketball star Stephen Curry would be endorsing one of his company’s products, according to court documents. Furthermore, Hardat falsely claimed that PepsiCo and Dr. Pepper Snapple Group, Inc. owed him more than $100 million as the result of purported business deals he consummated with them, the plea agreement states.

          Hardat supported his bogus claims of financial success by showing victims doctored digital images of bank account statements showing balances inflated far beyond any amount Hardat actually had at these financial institutions. One doctored image emailed to a victim purportedly showed a balance of nearly $500 million in one bank account, while another phony image purported to show a bank account balance of nearly $170 million, court papers state.

          In reality, Hardat never intended to use his investors’ proceeds for the business purposes that he represented, the plea agreement states. Instead he used the funds to pay off his personal debts, purchase luxury cars worth more than $100,000 each, pay rent at the Ritz-Carlton Residences, pay tuition for exclusive private schools for his children, and purchase luxury boxes and tickets for sporting and entertainment events, according to the plea agreement. Hardat also admitted that, in the style of a Ponzi scheme, he made payments to prior victim-investors out of subsequent victim-investors’ money.

          During the course of the scheme, Hardat took in more than $5 million from investors, who have suffered losses of more than $4 million.

          This matter was investigated by the Federal Bureau of Investigation.

          This case is being prosecuted by Assistant United States Attorney Adam P. Schleifer of the Major Frauds Section.

          LOS ANGELES – A former resident of the Ritz-Carlton Residences at LA Live in downtown Los Angeles has been arrested on federal wire fraud charges that allege he defrauded investors out of more than $5 million in a Ponzi scheme, deceiving one investor by falsely telling him that NBA stars such as Stephen Curry would be endorsing one of his beverage products.

          Khemraj Dave Hardat, 50, a Canadian national who has been living in the Los Angeles area on an expired tourist visa, was arrested Tuesday afternoon by special agents with the FBI. Hardat made his initial appearance Wednesday afternoon in United States District Court, and he is due back in court tomorrow for a hearing to determine if he will be freed on bond.

          According to the criminal complaint filed in this case, over the course of approximately 3½ years, Hardat duped at least seven victims into wiring him a total of more than $5 million. Rather than invest these funds in the businesses Hardat claimed to run, he allegedly used the money for personal expenses, or, in the style of a Ponzi scheme, made partial repayments to previous victims.

          According to the affidavit in support of the complaint, Hardat falsely portrayed himself as a man of significant educational and economic achievement, misrepresenting that he had a Ph.D. from Yale University and that he had generated hundreds of millions of dollars via deals with PepsiCo and Dr. Pepper. Hardat bolstered this false impression by displaying a luxurious lifestyle, which included the rented residence at the Ritz-Carlton, Lamborghini and Maserati sports cars, a luxury box at Staples Center and his children’s placement at prestigious private schools.

          Hardat allegedly convinced one victim – a financial professional – to loan him $4 million by telling him of Hardat’s purported friendships with NBA players and the CEO of PepsiCo, and by showing the victim a doctored bank statement reflecting a balance of $498 million. In October 2014, according to the affidavit, Hardat allegedly called the victim and requested a $4 million loan because an investor was dropping out of a deal set to close in a week. The victim agreed to wire the money to Hardat’s company, O4 Worldwide Holdings, with an agreement that Hardat would repay the $4 million, plus $200,000 in interest, within one week. Besides a late payment of $205,000 in November 2014, Hardat never repaid the victim, instead using $3.8 million of the victim’s money to pay personal expenses and earlier victims, including one court judgment against him.

          After the victim confronted Hardat about the debt in December 2014, Hardat allegedly told him of a new business opportunity and represented that the $4 million owed would turn into $12 million. Hardat then wrote the victim a check for $8 million, which later was returned for insufficient funds.

          Another victim, who met Hardat through their children’s school events, allegedly wired Hardat a total of $393,854 in loans for his business after Hardat falsely represented that Basketball Hall of Famer Shaquille O’Neal was one of his business partners and that Stephen Curry would be endorsing one of his company’s products. Instead, Hardat allegedly used the money to make payments on his Maserati and Lamborghini sports cars. Although the victim has been repaid about $235,000, law enforcement analysis indicates that at least $215,000 of that amount came from subsequent loans or investments that Hardat fraudulently obtained from subsequent victims, court documents state.

          A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

          The criminal complaint charges Hardat with one count of wire fraud, which carries a statutory maximum penalty of 20 years in federal prison.

          At Wednesday’s court appearance, a United States Magistrate Judge scheduled tomorrow’s detention hearing, as well as a preliminary hearing on December 12 and an arraignment on December 18.

          The FBI is conducting the investigation into this case.

          This case is being prosecuted by Assistant United States Attorney Adam P. Schleifer of the Major Frauds Section.