A supposed AI-driven hedge fund promising guaranteed double-digit returns turned out to be nothing more than smoke and mirrors. On Thursday, Mina Tadrus, the CEO of Tadrus Capital, pleaded guilty to investment adviser fraud in a Brooklyn federal court, admitting he deceived investors who poured more than $5 million into his fund.
The AI Trading Mirage
Tadrus, a Tampa, Florida resident, promoted his hedge fund as “the world’s first private high-yielding and fixed-income quantitative hedge fund” and claimed it used cutting-edge AI-driven trading strategies to deliver 18% to 30% annual returns.
But behind the flashy sales pitch, no real AI-powered trading existed. Instead, prosecutors revealed that Tadrus barely invested any money at all, using over $1.4 million to pay off earlier investors in classic Ponzi scheme fashion and spending hundreds of thousands on personal expenses.
When standing before U.S. District Judge Hector Gonzalez, Tadrus offered a brief and telling admission:
“I took actions that were deceptive.”
