> they defrauded investors and lenders by fabricating "virtually all" of the now-bankrupt company's customer relationships and revenue.

> According to the indictment, the defendants used forged sham contracts to make it seem that iLearning's customers were real, and used "round trip" transfers of investor and lender funds -- meaning they sent money to purported customers, who then returned it to iLearning -- to manufacture revenue.

> At least 90% of iLearning's $421 million of reported revenue in 2023 was fabricated, the indictment said.

> The company went public in April 2024, and its market value on the Nasdaq peaked at $1.5 billion before a prominent short-seller questioned its reported revenue.

For the record the short sellers who blew up the fraud were Hindenburg Research. This is the second AI company they've discovered that is a scam, the other being Super Micro with their chip-selling scam: https://www.forbes.com/sites/tylerroush/2026/03/20/super-mic...

iLearningEngines .. hindenburg did some research ILearningEngines: An AI SPAC with Artificial Partners and Artificial Revenue (2 years ago) https://news.ycombinator.com/item?id=41390619

Unfortunately there is a real chance they get pardoned or just their cars dropped for a small sum of 1-5 million dinner.

The unscrupulous in the white house will take your money (for a pardon) no matter what the crime.

But does that actually happen much? I can think of a few high-profile examples, but pardons for random corporate fraud defendants seem rare even under administrations willing to use them transactionally.

No, no, no... money doesn't change hands directly. It's investment in the regime's crypto coin in the proper amount.

Play with fire, and you get burned...

These scams are all too frequent today, and putting these guys and others like them in prison would act as a deterrent.

We'll see if our system can actually hold any white collar criminals accountable though...

A lot of these people do go to prison but know one pays attention long enough to notice.

This same scam was common during the dotcom boom in the 1990s. A lot of people went to prison but every generation needs to learn this lesson the hard way apparently.

Yeah, the dotcom fraud prosecutions are actually pretty well documented -- Adelphia, WorldCom, Enron all landed people in prison. The problem is each wave of hype creates fresh marks who never followed the previous cycle.

Pardon coming soon in 2027

Using the right channels, they can buy a pardon. Let's see how it unfolds.

The pardon angle assumes this reaches the right political circles — historically, the evidence suggests white-collar defendants without strong donor networks rarely get that far, even with means.

No, that seems unlikely. They committed the cardinal sin of stealing from the rich.

It appears what really ended their little scam was the $421 million of reported revenue based on complete lies.

Because lying to investors about product hasn't been really an issue lately, even Intel ~5 years ago did some presentations that were a complete fantasy back when they were desperate to keep their stock value but could not produce a chip smaller than 14nm.

If they prosecute CEOs based on lies to investors other than accounting, almost all AI startups would go down.

CEOs can say basically anything when it's talking about the future. They just have to include a safe harbor disclaimer about forward-looking statements.

iLearningEngines? I guess we're all familiar with them and have thoughts and concerns about them. We don't. We're not.

If they arrest everyone who does a wash transaction to generate the appearance of revenue there aren't going to be many founders left standing in 2026.

When Armstrong's Tour de France doping was finally caught, the top 22 placed racers were all doping. It was the 23rd placed racer that was reportedly clean, and got the eventual first place.

That framing normalizes it. Wash transactions aren't a gray area -- they're wire fraud. The question isn't how common it is; it's why enforcement waited this long.

amd that’s probably good

Fabricating "virtually all" revenue is a bold strategy for a company with "learning" in the name.

Because you fixate on the narrative you want to see and ignore the scamming being done by groups you're sympathetic to.

> Why’s it almost always south asians

It isn't. It's very rarely south asians.

I think most of the stories I’ve read, lately, are about good old-fashioned WASPs. Some, from fairly wealthy backgrounds.

But it will generally be reflective of the main demographic; as that affects the sample size.

I’ve learned that anyone can become a grifter, but the best ones are attractive and articulate.

How many big fraud cases happened in the US over the last decade? I can think of many of them. Would u say that it’s a cultural thing in the US because of that? So ur statement is more about prejudice than anything.

Someone call the Olympics because this is the largest jump I've ever seen.

there's x evil people per million in every country, india just happens to have a lot of people. china tends to keep things within their borders.

I suppose it's a cultural thing for Americans then too, given the current White House occupant? I don't know, maybe every culture just has their share of shitty people.