Diamond Bar Man Gets 151-Month Sentence for Fraud Scheme

A Diamond Bar investment company chief executive officer and co-owner will serve a 151-month sentence in federal prison for bilking investors out of more than $30 million.

U.S. District Judge Percy Anderson sentenced Syed Qaisar Madad, 66, today.  After the hearing, Madad was remanded into the custody of the United States Marshal, authorities said.

Anderson called citizenship a “priceless treasure” and that the defendant’s actions violated his “obligation and responsibility to respect the rule of law,” according to a Department of Justice news release. 

Madad emigrated from his native Pakistan in 1972.

The judge set a restitution hearing for Aug. 12 to determine the amount Madad should repay his victims, a total expected to be around $32.7 million.

In February, the defendant pleaded guilty to wire fraud and tax fraud, admitting the investors lost more than $30 million when his Ponzi scheme fell apart in March 2011. 

Madad did day trading through a Diamond Bar-based company called Technology for Telecommunication and Multimedia, Inc.  He told investors that he was a successful trader who never lost money except for one day in 2006, authorities said.

In 2005, he started collecting money from investors.  He ran the scheme for 5½ years.  Madad was interviewed by and featured in media serving the Pakistani-American community and told reporters and potential investors that he had developed a guaranteed day-trading technique, authorities said.

He reportedly sent victims monthly account statements that always reflected gains and some victims gave him more money based on the results. One of his clients sued Madad two years ago.

Madad also previously said in court that he under-reported his income tax in 2009 by about $4.9 million to the Internal Revenue Service. 

Before and after his arrest in October 2012, the government seized a Mercedes-Benz C63, jewelry, and funds traceable to the investor money, according to the Department of Justice. The defendant also agreed to forfeit his Diamond Bar home, the Mercedes-Benz, 68 pieces of jewelry, and other luxury items, including silk and wool handmade Oriental carpets.    

He also agreed to pay $5 million in unpaid taxes for 2006 to 2010. 

Madad’s family, friends, and professional colleagues, as well as associates of his wife, a medical doctor who operated a Lynwood practice, gave money to the defendant to invest. 

He made contributions to charities in the United States and abroad and donated more than $1 million to U.S. political figures with money he got from investors.  He invited victim to fundraisers and events at his home, including a dinner with former Pakistan President General Pervez Musharraf.

Madad returned around $17.7 million to investors, but most of that was through Ponzi payments he got from funds his investors provided rather any from any profits or interest earned, authorities said. 

“Nothing can account for defendant’s criminal conduct other than arrogance and greed,” prosecutors wrote in a sentencing brief.

More than 40 victims attended the sentencing hearing, with six of them speaking in court about how the financial losses have affected their families, children’s education, and retirement plans. 

Madad also was sentenced for not reporting his income fully. He admitted to not doing so for a total of $4.9 million in 2009.  Tax officials also found that he had under-reported his income for 2007-08 and 2010 by an additional $9.4 million.

“The tax system and our system of justice rely on honesty and the good faith of the American public,” the judge said. “The integrity of these systems rests on deterrence.”