When prosecutors unveiled the plea deal late last week of Shamoon Rafiq, who orchestrated a $10 million scheme that deceived investors into investing in pre-IPO tech companies like Airbnb, they stated that the defendant was posing as a representative of a prominent family office.
The family office isn’t specifically named in the complaint, but details gleaned from court filings and online records align with those of Man Capital, the family office of the Mansour family. Established in 2010 by billionaire Mohamed Mansour and his son, Loutfy Mansour, Man Capital doesn’t have any affiliation with Rafiq or the parent company Mansour Group, which originated in 1952 as a cotton exporter and has since expanded to become one of the world’s largest General Motors dealers and a significant Caterpillar distributor.
Both a spokesman for Man Capital and the Manhattan U.S. Attorney’s Office, which is handling Rafiq’s prosecution, declined to comment to CNBC.
Rafiq, aged 50, entered a guilty plea on Thursday to one count of conspiracy to commit securities fraud and wire fraud. He could potentially face up to five years in prison.
According to the U.S. attorney’s office, Rafiq, who had previously been convicted in 2001 of a similar offense, orchestrated a “bold scheme” from Singapore in 2020, deceiving U.S. investors during a period of heightened tech IPO activity and soaring valuations. During that summer, Rafiq purportedly established fake domain names and email addresses, assuming the identity of a senior executive at the family office.
According to prosecutors, Rafiq purported to be a close associate of the CEO of the family office, referred to as Victim-1 and assumed the identity of another executive from the same office, identified as Victim-2. Man Capital was the undisclosed family office through various details outlined in the prosecutor’s complaint, such as partial domain names and website particulars that precisely matched Man Capital’s online presence.
The title and duration of Loutfy Mansour’s tenure also correspond to those of the unidentified Victim-1 mentioned in the complaint. The Mansour family publicly introduced its family office in 2020, revealing its investments in Airbnb and other technology firms.
Rafiq commenced systematically pitching boutique investment banks and institutional investors in 2020, a year marked by notable IPOs from tech giants like Snowflake, Unity Software, and DoorDash, alongside Airbnb. He claimed to have access to shares of pre-IPO companies, a potentially profitable proposition given the substantial surge in stock prices upon their public debut.
In July 2020, an unnamed boutique investment bank in New York was introduced to Rafiq through a business associate of one of the bank’s partners. Rafiq purported to be a close confidant of the family office’s CEO, offering to sell $9 million worth of Airbnb Series C shares, which, in reality, did not exist.
Although Airbnb had initially announced plans to go public in 2019, the onset of the Covid pandemic delayed its IPO. Shortly after Rafiq’s initial contact with the investment bank in August 2020, reports emerged regarding Airbnb’s confidential IPO filing. Four days following these reports, the unnamed investment bank agreed to purchase the nonexistent shares and transferred $9 million to an escrow account.
Airbnb eventually went public in December, experiencing a 112% surge in its stock price on the opening day. Prosecutors initially brought charges of securities fraud, wire fraud, and identity theft against Rafiq in 2021. He had committed a nearly identical offense two decades earlier when he was convicted of attempting to sell pre-IPO shares of Google.
Inner City Press, a news outlet covering the Southern District of New York, first disclosed Rafiq’s detention in January, following his extradition from Singapore.
U.S. Attorney Audrey Strauss stated in a 2021 release that “Shamoon Rafiq exploited investors’ fear of missing out on the potential gains to be earned from investing in companies before they go public, and solicited millions of dollars from investors through brazen lies and deception.”
Upon learning of the scheme, the bank froze the $9 million in escrow funds and informed the unnamed family office through a “trusted intermediary,” as outlined by prosecutors. The family office’s legal counsel promptly reported the fraud to law enforcement.
