A Canadian national who allegedly posed as a beverage entrepreneur and ran a $5 million Ponzi scheme while living at the lavish Ritz-Carlton Residences in downtown Los Angeles is expected to plead guilty Monday to federal fraud charges.
Khemraj Dave Hardat, 50, has agreed to plead guilty to five counts of wire fraud. Each count carries a possible maximum penalty of 20 years in federal prison, according to the U.S. Attorney’s Office.
Hardat, who has been living in the Los Angeles area for 10 years on an expired tourist visa, was arrested in November and ordered to remain behind bars pending trial.
The U.S. Attorney’s Office alleges that Hardat conned investors out of millions of dollars, telling one victim that NBA stars such as Stephen Curry would be endorsing one of his beverage products.
According to documents filed in Los Angeles federal court, Hardat allegedly duped at least seven victims into wiring him a total of over $5 million during the course of about 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.
Prosecutors contend that 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.
At the conclusion of a detention hearing in November, U.S. Magistrate Judge Michael R. Wilner ruled that Hardat was a danger to the community and should not be released to await trial.
“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.
In her unsuccessful bid to have her client granted bail, defense attorney Julia Deixler said she found the government’s argument “unpersuasive.”