June 16, 2024

An MBA from Harvard Business School Allegedly Swindles Alums in a $2.9M Pyramid Scheme

New York’s Attorney General has levelled charges against an MBA holder from Harvard Business School, alleging he masterminded a $2.9 million pyramid scam that fooled at least 29 investors. This includes one individual who reportedly committed suicide after learning his entire investment was lost.

On Thursday (February 29), New York State Attorney General Letitia James accused Vladimir Artamonov, an HBS alum from the class of 2003, of deceiving investors with exorbitant returns of 500% to 1,000% on their investments. Artamonov purportedly claimed insider knowledge of investments to be made by Berkshire Hathaway, the holding company run by Warren Buffett.

Three Harvard classmates from 21 years ago: Mei Shibata, who is currently a partner at Oliver Wyman; Arndt Nicklisch, chief investment officer of James Campbell Co., a Hawaii-based real estate firm; and Rahul Mehendale, a managing director at Deloitte, are among those who have submitted affidavits against Artamonov, as per the court order.

This lawsuit signifies a significant downfall for a once-prominent figure in New York City’s social scene, as illustrated by numerous paparazzi photos of him at various city galleries and trendy spots. Artamonov, who has been seen at the Electric Room, The New York Edition, and HG Contemporary Gallery along with ex-model Quinta Witzel and former Olympic skater Alexandra Duisberg, who was once in a relationship with Eric Schmidt, a former Google executive. He was also present at the midsummer summer solstice celebration at the PUBLIC Hotel with David Roeske, a mountaineer turned financial executive known for his ascents of Mount Everest, Cho Oyu, Broad Peak, and K2.

THE DANGERS WITHIN AN MBA NETWORK

An MBA from Harvard Business School Allegedly Swindles Alums in a $2.9M Pyramid SchemeAn MBA from Harvard Business School Allegedly Swindles Alums in a $2.9M Pyramid Scheme

Vladimir Artamonov. LinkedIn

As stated by Attorney General James, Artamonov managed to convince his intelligent friends and acquaintances to part with their money using his persuasive skills. “Even clever investors can fall prey to tricksters, especially when personal relationships and networks are used to fabricate a sense of trust,” Letitia James quoted in a press release from her office. “Vladimir Artamonov utilized his alumni status from Harvard Business School to exploit his peers and others under the pretense of being authentic and reliable. He has been clandestinely bilking people of their investments, leading to dreadful consequences. Today, we have intervened to halt this scheme, and we urge anyone who feels defrauded to reach out to my office.”

James, renowned for obtaining a $500-million judgment against Donald Trump for fraud in one of the numerous ongoing legal proceedings involving the former president, states that her office has secured a court order preventing Artamonov from “causing more harm to investors through his fraudulent actions,” and forbidding any withdrawal or transfer of funds from his bank and brokerage accounts.

A pyramid scheme is a type of fraud wherein investors are enticed and paid profits from the funds injected by subsequent investors. Artamonov stands accused of misappropriating millions of investors’ money through the purchase of short-term options, without disclosing his losses, but instead repaying existing investors with new investment funds. “Artamonov also misused his investors’ money to finance unauthorized personal expenses such as vacations, shopping, and dining,” explains James’ office.

James’ office reveals that since September 2021 until now, Artamonov has been soliciting funds for an investment fund he dubbed “Project Information Arbitrage” or the “Artamonov Fund”. The HBS alumni network was the primary source of investors, many of whom “did not share a close personal relationship with him and merely knew him as an acquaintance.”

ARTAMONOV ESTABLISHED HIS OWN HEDGE FUND IN 2009

Artamonov has, since 2021, managed to secure at least $2.9 million from a minimum of 29 individual investors, and is alleged to have participated in a pyramid scheme by paying old investors with funds from new ones,” as stated by James’ office. “For example, in October 2022, Artamonov received a $100,000 investment from a patron, and within a few weeks lost almost all of these funds on short-term options. However, when the investor sought an update, Artamonov informed him that he had yet to invest and solicited an extra $50,000 from him.

The scam was brought to the attention of James’ office after hearing about an investor who took his own life upon discovering he had lost $100,000 in Artamonov’s alleged scheme. Still, “Even in the wake of this tragedy, Artamonov continued to attract new investors and deceived them about the fund’s strategy and returns,” states James’ office.

When reached for comments by CNBC, HBS spokesman, Mark Cautela, replied via email: “We only discovered this earlier today. We have no additional comments.”

According to his LinkedIn profile, Artamonov is listed as an “investment professional” at Greenlight Capital, a hedge fund based in New York City managing a $4.5 billion portfolio; however, he hasn’t worked there for more than 15 years since departing the firm in December 2008. Since 2009, he has adopted the role of a portfolio manager at Coastal Investment Management, a Californian “value-focused” hedge fund he co-established with Todd Plutsky. As per data insights company Preqin, Coastal “employs a long/short equity strategy with a focus on unique opportunities. The firm’s flagship fund, Coastal Investment Partners, launched in July 2009.”

Prior to joining Harvard Business School in 2001, he worked as a financial analyst in Merrill Lynch’s M&A group for two years, landing this role after graduating from The Wharton School in 1999.

AN MBA DEAN FOUND GUILTY OF FRAUDULENT MBA RANKINGS