A Canadian national who allegedly ran a $5 million Ponzi scheme while living at the lavish Ritz-Carlton Residences in downtown Los Angeles was denied bail Friday and ordered to remain in federal custody pending trial on a wire fraud charge.
Khemraj Dave Hardat, 50, who has been living in the Los Angeles area for 10 years on an expired tourist visa, was arrested this week by special agents with the FBI, according to the U.S. Attorney’s Office.
At the conclusion of a detention hearing, U.S. Magistrate Judge Michael R. Wilner ruled that Hardat was a “danger to the community” based on his “pervasive” conduct.
“He just talks to people and gets their money,” Wilner said, adding that he could think of no combination of conditions that could be ordered to prevent the defendant from engaging in investment fraud if he was to be released on bail.
Hardat’s alleged scheme was not a “one-off crime of opportunity,” but a “serious and long-term” operation that involved “grooming” potential victims, the judge said.
The U.S. Attorney’s Office alleges that Hardat conned investors out of more than $5 million, telling one victim that NBA stars such as Stephen Curry would be endorsing one of his products.
In his argument for pretrial detention, Assistant U.S. Attorney Adam Schleifer told the court that Hardat was under an arrest warrant in Toronto, Canada for “similar conduct” and was about to be arrested for contempt of civil court in Los Angeles when he was picked up by the FBI in the current case.
“He represents a substantial danger to the community,” Schleifer said.
In her unsuccessful bid to have her client granted bail, defense attorney Julia Deixler said she found the government’s argument “unpersuasive.”
According to the criminal complaint filed in Los Angeles federal court, Hardat allegedly duped at least seven victims into wiring him a total of more than $5 million over the course of more than three years. 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 postgraduate doctoral degree from Yale University and that he had generated hundreds of millions of dollars via deals with PepsiCo and Dr Pepper.
Hardat bolstered the false impression by leading a luxurious lifestyle, which included the rented condominium at the Ritz-Carlton, Lamborghini and Maserati sports cars, a luxury box at Staples Center and his children’s placement at private schools, federal prosecutors allege.
The criminal complaint charges Hardat with one count of wire fraud, which carries a possible maximum penalty of 20 years in federal prison.