Judge Finalizes $4.1M SEC Deal With AI Fraudster Whose “Hedge Fund” Never Existed
America ı By Rihem Akkouche
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In a dramatic end to a tangled web of false promises and fabricated technology, a Brooklyn federal judge has approved a Bogus AI $4.1M SEC Deal with a Florida man who pretended to helm an AI-powered hedge fund—only for the Justice Department to reveal his firm was little more than smoke, mirrors, and doctored buzzwords.
SEC Says Ill-Gotten Gains Top $4 Million
U.S. District Judge Frederic Block entered the final consent judgment Friday against Mina Tadrus, CEO of Tadrus Capital LLC, concluding that his profits from the scheme exceeded $4 million, with an additional $72,000 in prejudgment interest. The judge confirmed that the SEC settlement will be fully satisfied by the restitution Tadrus owes in a parallel criminal case.
That earlier criminal case ended with a 30-month prison sentence for Tadrus in August—followed by two years of supervised release—after he pled guilty to investment adviser fraud.
Judge Block reaffirmed the prior partial consent judgment issued in August, imposing a sweeping officer-and-director ban and prohibiting Tadrus from participating in the issuance, purchase, or sale of securities for any company he owns or controls.
Judge Orders Assets Transferred to Court
The Friday order directs the immediate transfer of remaining Tadrus Capital funds held by Brex Inc., First Internet Bank of Indiana, and assets deposited in the Court Registry Investment System. The transfers will be used to satisfy the restitution imposed in the criminal matter.
In the SEC’s consent filing, the regulator highlighted Tadrus’ sworn admissions from the criminal case. The agreement also bars Tadrus from claiming later that he admitted nothing—closing the door to future denials.
The False AI Narrative That Hooked Investors
The SEC’s September 2023 complaint laid out a breathtaking tale of deception. Tadrus, based in Tampa, launched Tadrus Capital in 2020 and marketed it as the general partner of an investment vehicle—Tadrus Capital Fund LP—that supposedly deployed proprietary “artificial intelligence-based high-frequency trading models™.”
He claimed those AI systems could deliver annual returns as high as 30%, branding the fund as the “world’s first private high-yielding and fixed-income quantitative hedge fund.”
Investors bought the story. Tadrus raised $5 million.
But according to the regulator, nearly none of that money ever saw a real investment platform. Instead, Tadrus used $1.8 million to pay earlier investors in the classic pattern of a Ponzi scheme—disguised as “guaranteed” monthly returns. The rest fed his lifestyle: salaries, personal expenses, and even his own credit card debts.
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