A company founded in 2010 and dissolved in 2025 has been deceiving investors and shareholders through false revenue figures and fake contracts. Two Indian-origin men have been charged with an elaborate financial scam surrounding iLearning, a Maryland-based technology company that markets itself as an “out-of-the-box artificial intelligence platform.” Founder and former CEO Puthugramam “Harish” Chidambaran and iLearning’s former CFO Sayyed Farhan Ali “Farhan” Naqvi were arrested and appeared in court on April 17. They took advantage of investor excitement about the artificial intelligence boom by lying to investors and lenders and inflating the numbers, court documents allege. U.S. Attorney Nocera said the truly contrived parts of their story were their clients and revenue.
Company growth story
Founded in 2010, iLearning claims to make revenue primarily by selling licenses to its platform to customers, with the company reporting rapid revenue growth, reaching $421 million by 2023. In April 2024, iLearning became a publicly traded company and received $40 million in loan proceeds from a New York City branch of a financial institution. The company subsequently received an additional $20 million in loan proceeds from the New York branch of another financial institution. After listing, iLearning’s shares began to be listed on Nasdaq under the stock code “AILE”, and the company’s market value quickly reached approximately US$1.5 billion.
False information, false contracts
Investors and lenders were unaware that the company had fabricated all of its revenue. The agreements they presented were mostly signed by family members. Court documents cite an example of a convoluted fraud case. At Chidambaran’s direction, a former iLearning vice president registered and opened bank accounts in the names of several purported iLearning customers. The two main defendants transferred millions of dollars from iLearning to accounts controlled by this individual. The person then sent those funds to other accounts he controlled in the names of other entities, eventually sending the money back to iLearning. The total value of these round-trip transactions exceeds $144 million.In 2024, an investment research firm discovered the fraud and issued a report saying that iLearning had lied about its revenue, causing the stock price to drop rapidly. iLearning eventually filed for Chapter 11 bankruptcy protection in the District of Delaware in December 2024, and the process subsequently converted to a Chapter 7 liquidation in 2025, marking the company’s demise.