Most businesses face ongoing challenges in finding and retaining customers for their products and services. Keeping clients and patrons happy is essential for maintaining a steady source of income, attracting new consumers, and demonstrating a level of success that encourages financial institutions and other investors to provide funding. Growing and nurturing a customer base can prove to others that a company is on the right track and will continue to excel.
Or, you know, you can just make up a bunch of fake clients and sham contracts.
According to a 10-count indictment unsealed in a Brooklyn federal court on April 17, 2026, that’s exactly the option Puthugramam “Harish” Chidambaran and Sayyed Farhan Ali Naqvi chose as standard operating procedure for their company. iLearningEngines, Inc. (iLearning). Claiming to use artificial intelligence (AI) as a way to revolutionize education, training, and financial performance, iLearning used its purported customers in a fraud scheme that resulted in the company being listed on the NASDAQ exchange and generating millions in common stock for Chief Executive Officer (CEO) Chidambaran and Chief Financial Officer (CFO) Naqvi.
The two men face charges of operating a continuing financial crimes enterprise, conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire fraud, and multiple counts of wire fraud. Chidambaran was arrested on April 17 in Potomac, Maryland, while Naqvi was taken into custody in San Jose, California, on the same day. The two will be reunited in a New York City courtroom in the near future. Citing concern that the men, Indian citizens who garnered millions from their scam and are a flight risk in the face of the substantial evidence alleging their guilt, U.S. Attorney for the Eastern District of New York Joseph Nocella has requested that they be denied the opportunity to post bail.
iSee What You Did There
Founded by Chidambaran in 2010, iLearning promised to “productize” institutional knowledge to improve “mission-critical business outcomes.” iLearning’s income would derive from selling licenses for its AI platform to customers. By 2023, the company claimed revenues of $421 million. This led to iLearning becoming a publicly traded company on NASDAQ in 2024 under the ticker symbol “AILE.” As a result, the firm soon secured $60 million in business loans from lenders and reached a market capitalization of $1.5 billion, with much faith placed in iLearning’s impressive customer base.
It likely came as a bit of a shock to many when, in 2024, an investment research firm issued a report that raised a cadre of red flags about iLearning. According to the report, iLearning had taken a few liberties with its alleged clients, including creating most of them out of thin air. Chidambaran would have employees and family members open bank accounts for fictional customers. They would then “round-trip” money from investors and loans, sending it to the faux consumers, who would then route it back to iLearning as “payment for licensing fees.” It’s estimated that over $144 million was transferred in this manner.
Despite claims by Chidambaran and Naqvi that their customer base was genuine, the publication of the report in August 2024 led to iLearning’s stock price tanking and its market value cratering. By December of that year, iLearning had filed for Chapter 11 bankruptcy protection. Chapter 7 liquidation followed in 2025, but both had walked away with millions from the alleged fraud.
Go Big or Go Home, I Guess
The brazenness of the alleged iLearning scam didn’t end with the scheme's exposure, as Chidambaran continued to try to hustle new investors to the very end. He and Naqvi allegedly deleted numerous communications from encrypted platforms after learning about a subpoena issued by a New York grand jury, while also instructing their alleged conspirators to do the same.
Given the fraud, conspiracy, and continuing financial criminal enterprise charges, Chidambaran and Naqvi are facing a minimum of 10 years in federal prison if convicted. The indictment includes a request for the full forfeiture of all illegally obtained funds. If they do end up behind bars, other inmates should be wary if the two offer to host a “Have We Got an Investment for You!” night.
Related Resources
- Consumer Scams FAQ (Consumer Protection Law)
- Proving Securities Fraud (FindLaw’s Securities Law)
- Build Your Small Business: Financial Foundations (FindLaw’s Incorporation and Legal Structures)
