stealing money
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The operator of a hedge fund that promised high returns, powered by artificial intelligence, pled guilty to fraud in a New York court on Thursday.

At a federal courthouse in Brooklyn, Mina Tadrus pled guilty to investment advisor fraud in connection with his hedge fund, Tadrus Capital LLC, which was falsely marketed as using AI-driven trading strategies to generate guaranteed annual returns of at least 30%.

According to court filings, instead of using investor funds as promised, Tadrus used their money to make Ponzi-like payments to new investors, to pay employees, and for other unapproved uses, defrauding investors of over US$5 million.

“The only thing more artificial than Tadrus’ AI-driven hedge fund was his sincerity,” said Harry Chavis, Jr., special agent in charge of the Internal Revenue Service (IRS) criminal investigation unit in New York, in a release.

“He sold a dream to trusting investors and instead of turning their money into profit, he swindled it for his own luxuries,” he said.

In 2023, the U.S. Securities and Exchange Commission (SEC) filed a parallel civil action against Tadrus and his firm.