Saudi student loses SR330 million in investment scam
A Saudi scholarship student in California has accused an economics professor of Arab origin of swindling him of SR330 million ($88 million) in an investment scam, local media said.
Jaralla Al-Jaralla, a Saudi student, is suing Ayman Kandeel, an Egyptian national, at the Superior Court in South California for security fraud and negligence after the latter claimed that he would invest the money in an equity fund, the Courthouse News Service reported.
According to Greenfield consultancy, Al-Jaralla’s assignee, Kandeel entered into close ties with the student who came from Saudi Arabia to study economics at the university.
The pair reportedly developed a close relationship of trust that flourished, not only as a result of Kandeel’s experience in finance, but also stemming from their common Middle Eastern background, according to the complaint.
Kandeel told Al-Jaralla that in addition to being an economics professor, he also owned a private equity fund that catered to wealthy investors, the 23-page complaint said.
Exploiting their relationship of trust, Kandeel convinced Al-Jaralla to invest $88m of his father’s money into Kandeel’s fund, according to the complaint.
Kandeel promised the student that he will get back 20 percent of the fund in a year. However, after one year when Al-Jaralla did not get anything, he attempted to investigate the delay in profits by verifying the fund’s financial statements.
The university professor then confessed that he did not own any asset, the media said.
The Saudi student is seeking compensation for his family’s money and punitive action against his university professor and his American associate, the paper said.