In a recent court proceeding, Mina Tadrus, the founder of hedge fund Tadrus Capital LLC, has been sentenced to 30 months in prison. The sentencing followed Tadrus's February 2025 guilty plea to charges of investment adviser fraud amounting to over $5.7 million. Federal court in Brooklyn saw United States District Judge Hector Gonzalez delivering the judgment, which also includes an order for Tadrus to pay restitution totalling $4,224,850. Tadrus had falsely claimed to operate a hedge fund powered by artificial intelligence-based algorithmic trading, promising investors unfounded high returns.
According to an announcement from Joseph Nocella, Jr., United States Attorney for the Eastern District of New York, Tadrus exploited the enthusiasm for AI technology as a front to deceive investors. Nocella stated, "The defendant traded on excitement over the newest AI technology to trick investors to invest millions with his hedge fund. In the end, he perpetrated one of the oldest frauds in the book," as reported by the U.S. Attorney's Office, Eastern District of New York.
FBI Assistant Director in Charge, Christopher G. Raia, commented on the betrayal of trust by Tadrus, highlighting the responsibility of law enforcement to protect the public from such frauds. He said, "Mina Tadrus shamelessly lied to investors of his hedge fund - many of whom were friends and family - preying on their trust to defraud them out of more than $5 million," as reported by the U.S. Attorney's Office.
Special Agent in Charge at IRS-CI New York, Harry T. Chavis, Jr., underscored the severity of Tadrus's actions and the ensuing punishment. He addressed the false promises of high profits sold to investors by Tadrus, and affirmed that the sentence and restitution underpin the reality of Tadrus facing actual prison time and accountability for his actions. Chavis stated, "While Tadrus sold a dream of high-profits to his investors, the only return they saw was the negative result of being swindled by someone they trusted," as per the U.S. Attorney's Office.
As detailed in the court filings, Tadrus Capital was founded in June 2020, with Tadrus exaggerating its capabilities and security. The fund, which claimed to be "recession-proof" and boasted access to substantial purchasing power, was, in fact, the centerpiece of a Ponzi scheme. From September 2020 to July 2023, Tadrus hoodwinked at least 31 individuals, many from his own community and inner circle, leading them to invest in the non-existent AI-based trading. Instead of legitimate investment activities, these funds were misappropriated to maintain the illusion of returns and to cover Tadrus's personal expenses. The prosecution of this case was managed by the Office’s Business and Securities Fraud Section, with Assistant United States Attorney Jonathan P. Lax in charge.
