Indictment: Harvard grad preys on biz school alums for Ponzi scheme

A Harvard graduate who told investors he could time Warren Buffett’s investments to return huge profits was actually running a Ponzi scheme, authorities said.

Vladimir Artamonov, 46, was indicted last week for defrauding fellow Harvard alumni out of more than $4 million. Artamonov is charged with securities fraud, investment adviser fraud, and wire fraud, U.S. Attorney Jay Clayton, announced. He was arrested Thursday in Elkridge, Md.

“Artamonov betrayed investors, including friends and former Ivy League classmates, by promising a low-risk, high-return investment strategy, when in fact he gambled away investor money and paid off previous investors to continue his scheme,” Clayton said.

From at least September 2021 through February 2024, Artamonov allegedly defrauded numerous investors who participated in an investment opportunity he called “Project Information Arbitrage.”

A 2003 Harvard Business School graduate, Artamonov worked in the financial services industry, authorities said. He used his professional network to solicit investments from classmates and other alumni of Harvard, court documents say.

Project Information Arbitrage was to work like this, authorities say: Artamonov told investors that he would use their funds to execute an information arbitrage strategy focused on investments by Berkshire Hathaway and its legendary CEO, Warren Buffett.

According to Artamonov, Berkshire’s reputation created a lot of buzz around the publicly traded companies it targeted for investment. Once those investments became widely known, those companies’ share prices increased significantly.

Artamonov told investors that he could identify Berkshire’s new investments ahead of their public disclosure in filings with the Securities and Exchange Commission by reviewing public insurance company filings, court documents say. He would then buy shares ahead of the market run.

In reality, Artamonov defrauded investors, authorities say. Instead of executing the strategy that he had pitched, Artmonov primarily traded in risky short-term options that, for the most part, did not overlap with Berkshire’s investments or otherwise implement the arbitrage opportunity he proposed.

“Artamonov lost most of the funds or used them to pay for personal expenses, including lodging, food and alcohol, and transportation,” the indictment reads.

‘Crazy gains’ promised

The defendant then concealed those losses from investors while soliciting additional investments and repeatedly claiming that profitable investments were on the horizon. Artamonov sent messages to one investor assuring him that it was “[a]lmost certain we will make a ton of money” soon, and that they would “brag” about their “crazy gains” at the Harvard Business School reunion.

When investors eventually demanded the return of their funds, Artamonov allegedly repaid old investors with new investors’ funds, court documents say, or declined to repay investors altogether. Ultimately, he returned less than $400,000 to investors.

“Investor 2” gave Artamonov $500,000 in two separate investments, the indictment said.

“[U]pon receipt of Investor-2’s initial investment, Artamonov immediately misappropriated a significant portion – $150,000 – to pay back two earlier investors,” the indictment said. Artamonov then used the remaining portion of Investor 2’s investment to purchase options that had no overlap with Berkshire investments that had not been widely disclosed.”

Within approximately a week, Artamonov lost all of investor 2’s initial investment, the indictment said.

“When investors inquired about the performance of their investments … the defendant repeatedly withheld the truth from them,” the indictment claimed. “At times, Artamonov provided vague answers to investor questions, at other times he affirmatively misrepresented whether trading had occurred at all, and at still other times he told investors that he had obtained a profit.”

Artamonov is charged with one count of securities fraud, which carries a maximum sentence of 20 years in prison; one count of investment adviser fraud, which carries a maximum sentence of five years in prison; and one count of wire fraud, which carries a maximum sentence of 20 years in prison.

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