Phony MIT physicist bilked investors out of $24.6 million with Irvine tech firm, SEC alleges

An Irvine man bilked greater than 50 buyers out of $26.4 million with phony educational credentials, a fantastic rags-to-riches story and a promise to usher in “the next age of humanity” with cutting-edge nanotechnologies that might remedy most cancers, detect counterfeiting and supply an antidote to snake venom, in line with federal regulators.

Faiz M. Chowdhury, 54, who owns Irvine-based DTI Holdings Inc. and Quantum Age Corp., swindled enterprise capitalists within the U.S. and Asia by falsely claiming to be a Massachusetts Institute of Technology-trained physicist and mental prodigy, states a U.S. Securities Exchange Commission lawsuit filed in federal court docket.

From May 2018 to December 2022, Chowdhury handled DTI and QAC accounts as his “personal piggy bank,” the SEC mentioned. He allegedly spent funding funds totaling $19.8 million to help an extravagant life-style that included worldwide journey, playing, luxurious objects for himself and his household, ATM money withdrawals and wire transfers to numerous entities he managed.

Remaining investments totaling $6.6 million funded hire, payroll, gear, insurance coverage, and different bills for Chowdhury’s two firms, in line with the lawsuit filed in September.

The SEC is in search of everlasting injunctions and undisclosed financial penalties towards Chowdhury for violating antifraud provisions of the federal securities regulation.

In a submitting with U.S. District Court earlier this month, Chowdhury’s legal professional, Andrew Duffy, disputed the federal government’s claims. “We deny the allegations made by the SEC and are in the process of defending against those actions,” he mentioned.

‘Tormented’ by false allegations

Chowdhury, who has twin U.S.-Bangladesh citizenship, mentioned in a telephone interview he’s “tormented” by the false SEC allegations and blames the misunderstanding on a disgruntled investor with a vendetta.

“There is a lot of wrong information in the complaint that will get disproved very soon in court,” he mentioned. “We are real and are developing products that are going to market. My vision is to create a hunger and pollution-free world. That doesn’t happen overnight.”

Chowdhury mentioned he got here to the U.S. in 1997 to attend UC Berkeley, the place he obtained a bachelor’s diploma in electrical engineering and laptop science. He added that whereas he doesn’t have a doctorate from MIT he has obtained a administration certification from the distinguished college.

Chowdhury described himself as a visionary within the mildew of Martin Luther King Jr., saying he goals of utilizing know-how to supply equality for the Earth’s inhabitants by addressing poverty, starvation and air pollution.

“I have been trying to do good things for good people,” he mentioned. “I am doing everything I can to bring products to the marketplace that improve quality of life. I am a servant of humanity.”

Investors purportedly misled

Chowdhury allegedly touted DTI to buyers as a holding firm of cutting-edge know-how companies utilizing graphene, a two-dimensional carbon materials identified for its glorious electrical conductivity and mechanical stability, to forge new advances in well being, power and transportation.

To bolster that declare, he concocted a story stating that as a toddler in Bangladesh, village leaders recognized him as a savant and the U.S. authorities later recruited him to work on a top-secret program to develop graphene for army and business functions, in line with the SEC. Chowdhury denies ever working for the federal government.

Chowdhury advised the Southern California News Group the village in Bangladesh the place he grew up had no electrical energy or working water, which motivated him to develop applied sciences to deal with these issues.

The SEC lawsuit alleges Chowdhury additionally falsely claimed he served as a scientific adviser to President George W. Bush and later was an adviser and good friend of the late Sen. John McCain, R-Arizona.

Chowdhury falsely represented to buyers that he “pioneered scientific breakthroughs” at among the nation’s most prestigious analysis facilities, together with the National Aeronautics and Space Administration, Oak Ridge National Laboratory, California Institute of Technology and the Johns Hopkins University Applied Physics Laboratory, the go well with says.

He additionally knowledgeable buyers he was the unique inventor of graphene, however couldn’t be named on any patent or given credit score publicly as a result of secrecy of his authorities work, in line with the SEC.

Chowdhury denied claiming he found graphene, however acknowledged working with prime scientists to develop the fabric as a most cancers therapeutic.

‘I have enemies’

He blamed the misinformation about his background and firms on an offended investor attempting to discredit him. “I have enemies,” he mentioned. “One investor didn’t understand, got upset with me, and got the wrong idea.”

However, an investor, who declined to say how a lot cash they misplaced, and requested to not be recognized in order to not impede the SEC’s case, advised the Southern California News Group that Chowdhury’s intentions are crystal clear.

“Faiz Chowdhury lacks a moral compass and has created a charming persona that possesses the ability to look directly at you and smile and lie at the same while telling you he is trying to help humanity with his very sensitive government background,” mentioned the investor, who was persuaded to work with Chowdhury as a result of graphene exhibits promise in biosciences. “He targeted people who were not investment savvy, but believed that technologies could solve many problems.”

The SEC alleges Chowdhury offered buyers with wildly deceptive monetary projections forecasting astronomical revenues into the tens and even lots of of thousands and thousands of {dollars}.

To conceal his misappropriation of investor funds, Chowdhury maintained tight management of the funds at DTI and QAC and enlisted relations with little or no monetary expertise to assist him, the SEC mentioned.

By late 2019, some buyers in DTI turned disenchanted, complaining that Chowdhury had misled them, mismanaged their investments and didn’t make any progress towards commercializing graphene applied sciences.

Cancer remedy claims

As a consequence, Chowdhury created QAC to rebrand DTI and separate the rising variety of disgruntled buyers from his continued efforts to solicit new buyers, in line with the SEC.

Chowdhury unveiled QAC throughout a glitzy conference in Singapore on Aug. 23, 2019, ushering within the Quantum Age.

He vowed in a 42-minute YouTube video — replete with a mannequin dubbed “Quantum Girl,” clad in a futuristic silver jumpsuit — that QAC would cut back human struggling, remedy illnesses and defend the surroundings.

“My eternal humans and my family, please accept me with your grace and embrace my presence because I am one of you,” Chowdhury mentioned from a darkened stage inside a crowded banquet corridor. “I may not look exactly like you, but I am as beautiful as you are because we all have the quantum red inside.”

In an Aug 12, 2021, video, Chowdhury additional defined how the Quantum Age would result in a sustainable world.

When some DTI buyers who didn’t purchase the Quantum Age mantra started demanding their a reimbursement, Chowdhury allegedly used among the new investor funds raised by QAC to make Ponzi-like funds to prior DTI buyers.

Sometimes he performed on the feelings of some buyers to achieve their belief, in line with the SEC.

In one occasion, conscious that the mother-in-law of an investor had just lately died from most cancers and that the problem was delicate for him, Chowdhury allegedly went as far as to carry up a vile stuffed with a black liquid and falsely advised the viewers it contained a “cure for cancer,” the go well with states, noting that neither DTI nor its affiliated firms found and even tried to develop a most cancers remedy.

Chowdhury, who claims that he operated a profitable laboratory in a 27,000-square-foot constructing in Irvine till it was pressured to close down in 2020 attributable to an absence of funding, mentioned he’s extraordinarily near advertising a most cancers detection machine that may revolutionize medication.

“I am building this business to help the lives of many, many people,” he mentioned.