A Dearborn man pleaded guilty Thursday to his role in a $2 million investment fraud scheme, according to the United States Attorney’s Office.
Ahmed Alabadi, a 45-year-old resident of Dearborn who has dual citizenship in the United States and Iraq, entered his plea in federal court for committing wire fraud on multiple victims.
“Investment fraud is just a sophisticated way of stealing people’s money, but it sometimes leads to the financial ruin of victims,” U.S. Attorney Barbara L. McQuade said in a release.
According to the release from the U.S. Attorney’s Office, Alabadi promised investors substantial returns—in some cases up to 100 percent—if they gave money to his company, Fedek Group, Inc.
Alabadi told investors their money would be used to help rebuilding efforts in Iraq, engage in real estate transactions and carry out contracts Fedek Group had with the United Nations and other foreign countries.
But prosecutors said that Alabadi failed to deliver on the returns, and many investors did not even receive their principal investment back.
In addition, the money Alabadi collected from investors was not used for legitimate rebuilding efforts.
Instead, prosecutors said Alabadi employed a Ponzi-like scheme in which he used money collected from later investors to pay the earlier investors.
As part of his guilty plea, Alabadi will pay $2.349 million to the defrauded investors listed in the indictment.
In addition, he could face a prison sentence of up to 20 years, though federal sentencing guidelines are 51 to 63 months in prison.
Alabadi will have his sentencing hearing on Oct. 4 at 2:30 p.m. before U.S. District Court Judge Denise Page Hood.
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