NEW YORK, April 11 (Reuters) - U.S. prosecutors on Thursday unsealed criminal charges against the chief executive and a managing partner of failed private equity firm Abraaj, accusing them of defrauding investors by lying about the Dubai-based firm’s financial condition.
Abraaj Capital Ltd founder and Chief Executive Arif Naqvi and Managing Partner Mustafa Abdel-Wadood were charged with securities fraud, wire fraud and conspiracy in a pair of indictments filed in Manhattan federal court.
Abdel-Wadood is in U.S. custody, according to Nicholas Biase, a spokesman for federal prosecutors in Manhattan. Biase declined to comment on Naqvi’s whereabouts.
Benjamin Brafman, a lawyer for Abdel-Wadood, declined to comment. No lawyer for Naqvi could immediately be identified.
Abraaj was the largest buyout fund in the Middle East and North Africa until it collapsed last year after investors including the Bill and Melinda Gates Foundation raised concerns about the management of its $1 billion healthcare fund.
Prosecutors said in the indictments that from about 2014 until the firm’s collapse in May 2018, Naqvi and Abdel-Wadood schemed to give false information about the performance of Abraaj’s funds, inflating their value by more than half a billion dollars.
The prosecutors also said that Naqvi and Abdel-Wadood caused “at least hundreds of millions” of investors’ funds to be misappropriated, either to disguise liquidity shortfalls or for their personal benefit and that of their associates.
Reporting by Brendan Pierson in New York; Editing by Lisa Shumaker