New York entrepreneur Amanat indicted for fraud scheme

By Nate Raymond

NEW YORK (Reuters) – A self-described New York entrepreneur was arrested on Wednesday on charges that he conspired to hide the losses suffered by a hedge fund’s clients in a scheme that involved bankrupt video technology company Kit Digital Inc.

Omar Amanat, an investor in media, finance and technology companies, was charged in an indictment filed in Manhattan federal court with wire fraud, aiding and abetting investment adviser fraud, and conspiracy to commit securities fraud.

Amanat, who was an investor in “Twilight” studio Summit Entertainment before its 2012 sale to Lions Gate Entertainment Corp, was arrested in Short Hills, New Jersey, a spokeswoman for the Federal Bureau of Investigation said.

Prosecutors also unveiled an indictment against a former lawyer for Kit Digital, Rima Jameel of the United Arab Emirates, whom authorities are describing as a fugitive.

Amanat’s lawyer and Jameel did not immediately respond to requests for comment.

The indictment said Amanat, 43, conspired with Stephen Maiden, the manager of Maiden Capital Opportunity Fund, to hide losses in investments made for the Charlotte, North Carolina-based hedge fund’s clients in Dubai-based Enable Invest Ltd.

According to the indictment, the losses came after Maiden had solicited an investment in Enable from Kaleil Tuzman, a former Goldman Sachs analyst who by then had become chief executive officer of Kit Digital.

Kit Digital eventually invested $6.5 million, but Enable suffered heavy losses during the 2008 financial crisis, and by the end of that September had just $113,000 in an investment account, the indictment said.

Aware of the losses, Amanat persuaded Maiden Capital to provide Enable with another $2 million. Instead, he used the funds to repay money owed to Kit Digital, the indictment said.

Maiden Capital learned in February 2009 that Enable was insolvent. With Amanat’s approval, Stephen Maiden sent out bogus account statements to conceal losses from investors, according to the indictment.

In April 2011, Maiden Capital borrowed money from Amanat to avoid a redemption request that might have uncovered the fraud, the indictment said.

Stephen Maiden was sentenced in February 2015 to seven years in prison for carrying out a Ponzi scheme, following his guilty plea the prior year. He secretly pleaded guilty on July 1 to new charges related to Amanat’s case.

Tuzman was indicted in September for scheming to deceive Kit Digital investors about that company’s health. He has been held in Colombia pending extradition.

Kit Digital filed for bankruptcy in 2013.

The case is U.S. v. Amanat, U.S. District Court, District of New York, No. 15-cr-536.

(Reporting by Nate Raymond in New York; Editing by Lisa Von Ahn)