By Arul Louis

New York, Jul 1 (IANS): An Indian-origin entrepreneur with ambitious goals of developing virtual-world technologies has been arrested and charged by federal prosecutors in an alleged $45 million investment fraud scheme that targeted more than 10,000 people.

US Assistant Attorney General Kenneth Polite announced on Wednesday the filing of charges in a federal court in Nebraska against Neil Chandran, who owned several companies under the banner of ViRSE.

The Justice Department said that Chandran was arrested in Los Angeles.

The Department added that Chandran, 50, falsely promised investors an extremely high rate of returns by claiming that a consortium of wealthy persons, including two billionaires, was about to acquire one or more of his companies.

But there were no such buyers or billionaires and a substantial part of the funds collected from the investors "were misappropriated for other business ventures and the personal benefit of Chandran and others," the Department said.

He is charged with three counts of wire fraud, which usually involve transmitting or receiving funds in electronic transactions, and two counts of "engaging in monetary transactions in criminally derived property".

According to court papers, Chandran gave "false and misleading information" to a person, who was not identified, and who in turn passed it on to another.

That person, who was also not named, "marketed the investment opportunity to thousands of current and prospective investors through email updates and conference calls," the court papers said.

Some of the investors paid for their investments using cryptocurrency,

The companies that operated under the banner of ViRSE included Free Vi Lab, Studio Vi Inc., ViDelivery Inc., ViMarket Inc. and Skalex USA Inc.

The companies "developed virtual-world technologies, including their own cryptocurrency, for use in the companies' own metaverse," the Justice Department added.

A website with the name ViRSE had an invitation to "get a jumpstart on becoming a ViRSE Millionaire with our exclusive and limited edition ViRSEWare -- Android Devices preloaded with the beta ViRSE App Suite, and a generous bundles of ViRSE Tokens".

It said that ViRSE was "the virtual universe of people, places and content accessible from any internet-enabled device on this planet".

The Justice Department said that 39 Tesla vehicles as well as about 100 different assets, including real estate and other luxury vehicles, belonging to him could be forfeited depending on the verdict in the case and that many of them are being seized by authorities.

This appears to be at least his second run-in with the law.

In 2018 he was found guilty of fraud by a New York State court, according to an archived press release of the office of the state's Attorney General.

But, according to the release, he was not given a prison sentence on the condition that he pays $761,000 in restitution to the victims in addition to paying another $2 million in a civil suit.

His company involved in that suit was called Sungame and the fraud involved the sale of 3D tablets with the promise of rebating the price of $1,000, giving an education grant and providing profits from the resale of the tablets, according to the release.