Kundnani Stole Thousands Through Fake Fund
How much talent does it take to defraud a college student?
Not much, at least if you’re Nicky Kundnani.
Kundnani, a finance major, was charged on Wednesday with a number of fraud and theft related charges. This very well may be the most interesting story to happen at Penn State all year.
Defrauding the school through the Financial Management Association
In his role as president of the Financial Management Association, Kundnani got reimbursed for faked purchase receipts totaling approximately $3000. He also got reimbursed for conferences that he never actually attended.
“Worst person I have ever met in my entire life”
Let’s start with an anecdotal account. Daehee over at IT Milk posted an analysis of the Kundnani scandal this past weekend.
The most interesting comment came today from somebody who claims to have lived near Kundnani in Simmons Hall. Judging from the specificity of the comment, I believe that it is authentic. With any luck, we’ll get some comments on this post that confirm the anonymous commenter’s claims.
This is only about a third of the full comment, but it gets to the core issue: Nicky Kundnani sucks.
Whether it was pretending to talk to CEO’s on the phone (which was turned off), walking in to our rooms while counting money, pretending that he owned a house on the palm island of dubai (he’s from a suburb outside of houston), keeping a drawer full of fake Tiffany’s necklaces to bribe girls to sleep with him, or saying that he taught himself english by watching british comedy shows (bullshit), he was quite a character. All of this seemed harmless. I defended him constantly, saying that he was really just an insecure guy inside and that his lies never hurt anyone. He wasn’t an “evil man” like many of my friends thought.
I was wrong.
Nicki Kundnani stole my laptop and roofied my friends. He is a liar and a felon and will betray you if he thinks he can get away with it. He is the worst person I have ever met in my entire life.
Kundnani was not simply a petty thief. He also defrauded students into investing thousands of dollars with a fake hedge fund that he created himself.
We have the full story after the jump.
Stealing money through a fake hedge fund
Kundnani claimed to be the Managing Director of Draconius Asset Management, a hedge fund he said was based in Dubai. He also claimed Draconius had offices in London, the Cayman Islands, and New York. Here is how the company’s website described its staff (which was, in reality, Kundnani and whoever else he got to help him),
Our skill sets include a dual PhD holder (Applied Math & Physics), who has been a FX strategist for the likes of JP Morgan, Deutche Bank, Bear Stearns and others. A software MS with trading exp. of up to $1B and operations executive with $550M portfolio management/sales/marketing/IR and product development experience. On a cumulative basis, our team has over 10 yrs. experience related to FX, commodities and equity indices.
Penn State students invested approximately $10,000 into Draconius through Kundnani after he promised them substantial returns.
The Collegian described what happened in one of the transfers of money,
Police said Kundnani was given $3,000 in cash from another Penn State student in an envelope outside of Old Main April 6 to invest in his fictitious hedge-fund.
The paper also had details about the criminal complaint that may have been the impetus for Kundnani’s arrest,
When Kundnani gave the student investor a check in return for the $3,000, the student attempted to cash it on March 16 but the check bounced because Kundnani’s account was closed, police said.
Upon the student’s requests for his money returned, Kundnani presented him with a stock certificate on April 6 that he said guaranteed the student’s investment in Kundnani’s hedge fund, according to the criminal complaint.
Kundnani told the student if he wanted to be reimbursed he would have to send the certificate to Dubai, police said. He also told the student he could never prove he gave Kundnani the cash, according to the criminal complaint.
Draconius Asset Management has two websites. The older one is Draconius.org and the newer one is DraconiusAsset.com. (The former is registered to an address in Dubai but with an email address that belongs to Kundnani. The latter is registered to Nicky Kundnani at an address in State College.)
Kundnani was released on $2000 bail after being arrested on Wednesday.
New management More bullshit at Draconius
This update was posted to the website for Draconius Asset Management this past weekend,
May 1st, 2009: Due to recent events falsely implicating DAM, Nicky Kundnani – Managing Director of Global Alpha FX fund has chosen to step down from active duty till his name has been cleared. Till such time, Global Alpha FX Fund will be managed by Gabor Twomey. “With the economy facing significant headwinds due to dislocation in the credit markets and the negative effect on business conditions around the world, Gabor brings a deep background in foreign exchange market, encompassing both phyiscal and OTC trading experience”
Call me a n00b if you must, but I posit that Gabor Twomey is not a real person, if for no other reason than the fact that he does not show up on Google. The only other name on the Draconius website is Carly Proper, who is listed as being in charge of HR. There is a Penn State student by the name of Carly Proper, but we have no reason to believe that she is connected with Kundnani.
Other links of interest
Looks like Kundnani deleted his Facebook account
Former Penn State student Jessica Berriman may also have been involved in the scam (see comment #5).
Here is his LinkedIn profile. He claims that he was an analyst with Bear Stearns and that he is now a FX trader with Draconius Asset Management.
Ridiculous. That’s about the only word I can think of to describe Nicky Kundnani.
We received an email at 5:17 this morning from a ‘Keith Folkerd’ asking us for “any documented facts that indicate that the company is as you state ‘fake.'”
He claims that he is trying to dissuade a client from investing in Draconius.
I’ve included the email in full as a PNG. (Yes, I see that it has a confidentiality clause, but that’s simply not how confidentiality agreements work.)