You are currently viewing Three Additional Defendants Charged in Manahattan Federal Court in Connection With Fraud Schemes Relating To Technology Start-Up Company Kit Digital

Three Additional Defendants Charged in Manahattan Federal Court in Connection With Fraud Schemes Relating To Technology Start-Up Company Kit Digital

Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced the unsealing of charges today against Omar Amanat, Stephen E. Maiden, and Rima Jameel, a/k/a “Rima Jameel Al Fahl,” for their involvement in fraudulent schemes related to Kit digital (“KITD”), a publicly traded technology start-up company based in New York, and Prague, Czech Republic.

U.S. Attorney Preet Bharara said: “As alleged, these three defendants defrauded investors of millions of dollars through years of lies and deceit. Their fraudulent tactics allegedly included manipulating stock prices, hiding investment losses, and peddling falsehoods to investors. This type of alleged manipulation and deception undermines the fairness and integrity of our markets, and it is something that this Office and our law enforcement partners will fight to root out.”

FBI Assistant Director-in-Charge Diego Rodriguez said: “There are multiple charges announced today against Omar Amanat for his alleged roles in schemes to hide losses from investors, and to falsely inflate the share price and volume of a publicly traded company. Ensuring that all investors have factual information and fair markets are exactly why the FBI continues to investigate and bring to justice those who perpetrate fraudulent investment schemes.”

USPIS Inspector-in-Charge Philip R. Bartlett said: “What a tangled web Mr. Amanat tried to weave, when he allegedly conspired with others to devise a scheme to hide the significant losses and insolvency of the fund he controlled. His web of deception was broken when law enforcement put an end to his criminal activity.”

According to the Indictments[1] unsealed on Wednesday in Manhattan federal court:

Amanat – an associate of Kaleil Isaza Tuzman (“Tuzman”), the former Chairman and CEO of KITD – was charged with conspiring to manipulate the market in KITD shares with Tuzman, Maiden, and others, and with conspiracy, wire fraud, and aiding and abetting investment adviser fraud for participating in a scheme, along with MAIDEN, to defraud investors in Maiden’s hedge fund regarding investments in Enable Invest Ltd., an investment fund affiliated with Amanat. Amanat was arrested in New Jersey this morning and was presented today in Manhattan federal court before United States Magistrate Judge Frank Maas.

MAIDEN previously pled guilty to charges relating to his own involvement in manipulating the market in KITD shares, defrauding KITD shareholders concerning KITD’s investment in Maiden’s hedge fund, and defrauding Maiden’s investors concerning the Enable investment. MAIDEN is cooperating with the Government in this investigation.

Jameel, former outside counsel to KITD, was charged with conspiracy, securities fraud, and money laundering charges relating to an illegal scheme engaged in by Jameel, with others, including Tuzman and Robin Smyth (“Smyth”), KITD’s former CFO, to deceive KITD shareholders, members of the investing public, KITD’s independent auditors, and others concerning KITD’s true operating performance and financial results.

Jameel was convicted in 2002 of various federal offenses in connection with her work as an attorney. She subsequently fled the United States prior to sentencing and has remained a fugitive.

Tuzman, who was arrested in Colombia in September 2015 on market manipulation and accounting fraud charges, is being held in Colombia pending extradition proceedings.

Mr. Bharara praised the work of the FBI and the Postal Inspection Service, and thanked the Securities and Exchange Commission for their assistance. He added that the investigation is continuing.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Damian Williams, Andrea M. Griswold, and Edward Y. Kim are in charge of the prosecution.

The allegations contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.