New Jersey Man, 37, Convicted of Bilking Westchester Relatives Out of $1 Million

Jersey City, NJ resident Khawaja Saud Masud, 37, pleaded guilty to Grand Larceny and Securities Fraud charges this week in connection with his involvement in stealing $1 million from Westchester County relatives through an investment scheme, New York Attorney General Eric Schneiderman announced.

“The defendant convinced his own relatives to turn over their retirement savings with promises of a safe, lucrative investment,” said Schneiderman in a statement. “Instead, he squandered away their money with a risky strategy that could only benefit himself. My office will pursue justice from brokers who fraudulently solicit investors and commit securities fraud.”

Masud scammed his great-uncle and great-aunt, Dr. Kalim Irfani, a 75-year old retired pediatrician, and his wife, Rehana Irfani, “by fraudulently soliciting them to invest in his purported hedge fund, RKS Capital, LP,” according to Schneiderman.

He then squandered the money in a “highly speculative and aggressive investment strategy, trading stocks multiple times a day without his relative’s knowledge or permission.” According to Schneiderman, Masud lost hundreds of thousands of dollars of the Irfani’s money in just a few months.

From Schneiderman’s press release about the case:

As part of his guilty plea, entered today before the Honorable Justice Robert A. Neary in Westchester County Court, Masud admitted to making multiple false representations to the Irfanis to convince them to invest, including that he would safely invest their money, that he would preserve their $1 million investment, and that their investments would be transparent and monitored by an independent third-party administrator.

Masud further admitted that contrary to his representations to the Irfanis, he invested their money in a manner that he knew was unsafe and would not preserve their investment, and that he cancelled the services of the fund administrator who was responsible for sending monthly statements to the Irfanis. Masud admitted that he instead engaged in a risky trading strategy that was intended to benefit himself, and that as a result of his actions, he lost over $900,000 of the Irfanis’ investment in just three months.

Masud, who already repaid approximately $200,000 to the Irfanis, must pay an additional $300,000 in restitution to the Irfanis as a condition of his plea. As a result of his conviction in this case, Masud, who is not a United States citizen, now faces deportation to his native county of Pakistan.

Masud is scheduled to be sentenced on March 4.

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