Tuscaloosa Man Accused Of Defrauding Investors Out Of Over $400K In Alleged Ponzi Scheme

TUSCALOOSA, AL — The Alabama Securities Commission says a Tuscaloosa man has been arrested and charged with nine counts of securities law violations in what is believed to be a Ponzi scheme.

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Pathyam Patel , 23, was indicted in February by the Tuscaloosa County grand jury and was arrested on March 6. He is currently in custody, with his arraignment scheduled for June 18.

The commission says the nine counts against Patel include:

• One count of fraud in the sale of securities (Class B felony)
• Six counts of false statements in the sale of securities (Class B felony)
• One count of the sale of security by an agent not registered with the state (Class C felony)
• One county of sale of securities not registered with the state. (Class C felony)

The U.S. Securities and Exchange Commission defines a Ponzi scheme as "an investment fraud that pays existing investors with funds collected from new investors. Ponzi scheme organizers often promise to invest your money and generate high returns with little or no risk. But in many Ponzi schemes, the fraudsters do not invest the money."

Patel's bond was set at $30,000 for each Class B felony and $15,000 for each Class C felony.

The Alabama Securities Commission alleges that between 2017 and 2023, Patel sold over $400,000 in investment contracts to at least six investors, with Patel saying he was associated with Infinity Wealth Management — an investment advisory firm that he claimed was registered with the United States Securities and Exchange Commission.

Patel also allegedly claimed he could earn substantial profits for investors by investing their funds and guaranteed no loss of their principal investment.

However, after receiving the investors’ funds, the indictment says Patel represented to certain investors that they had to pay additional fees to maintain their investments and was found to have not invested the investors’ funds as communicated.

What's more, state investigators found that Patel had been using the funds for gambling on sporting events, personal expenses, and paying earlier investors.

The Alabama Securities Commission says Patel could not guarantee that investors would not lose their principal and was not registered with the commission to sell securities in Alabama.

Indeed, the Commission says the investment Wealth Management contracts Patel sold were not registered with the ASC, nor was Infinity a registered investment adviser or broker-dealer.

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