Fraudster who peddled fake pre-IPO Airbnb stock falsely claimed to represent Egypt’s Mansour family
The Airbnb logo is displayed on the Nasdaq digital billboard in Times Square in New York on December 10, 2020.
Kena Betancur | AFP | Getty Images
When prosecutors announced the plea deal late last week of Shamoon Rafiq, who ran a $10 million scheme that duped investors into buying into pre-IPO tech companies like Airbnb, they said the defendant was masquerading as a representative of a prominent family office.
The family office is not named in the complaint, but details from court filings and online records match those of Man Capital, the family office of the Mansour family. Man Capital was started in 2010 by billionaire Mohamed Mansour, one of three brothers behind Egypt’s second largest company, and his son, Loutfy Mansour.
Rafiq had no connection to Man Capital or parent company Mansour Group. The conglomerate was founded in 1952 as a cotton exporter and has since grown to become one of the world’s biggest General Motors dealers and a major Caterpillar distributor.
A spokesman for Man Capital declined to comment to CNBC, as did the Manhattan U.S. Attorney’s Office, which is prosecuting Rafiq.
Rafiq, 50, pleaded guilty Thursday to one count of conspiracy to commit securities fraud and wire fraud. He faces a maximum possible sentence of five years in prison.
The U.S. attorney’s office said Rafiq, who was previously convicted in 2001 of a similar crime, ran a “brazen scheme” from Singapore in 2020, defrauding U.S. investors at a time when tech IPOs were hitting the market at record levels and peak valuations.
In the summer of that year, Rafiq allegedly created created fake domain names and email addresses masquerading as a senior executive at the family office.
Mohamed Mansour, president of Mansour Group, poses for a photograph following a Bloomberg Television interview in London, U.K., on Thursday, Feb. 11, 2016.
Simon Dawson | Bloomberg | Getty Images
Prosecutors say Rafiq pretended to be a close associate of the CEO of the family office, who was described as Victim-1, and impersonated another family office executive, identified as Victim-2.
CNBC was able to identify Man Capital as the unnamed family office through a series of details in the prosecutor’s complaint, including partial domain names and website details that exactly matched Man’s online presence.
Loutfy Mansour’s title and tenure also match the title and tenure of the unidentified Victim-1 in the complaint. The Mansour family publicly launched its family office in 2020, and disclosed its stakes in Airbnb and other technology companies.
Rafiq began methodically pitching boutique investment banks and institutional investors in 2020, a year that featured blockbuster IPOs from tech companies including Snowflake, Unity Software and DoorDash, in addition to Airbnb. Rafiq was claiming he had access to shares of pre-IPO companies, a potentially lucrative opportunity given how much stocks could pop when they hit the public market.
In July 2020, an unnamed boutique investment bank in New York was introduced to Rafiq through another business associate of a partner at the bank. Rafiq purported to be a close friend of the family office’s CEO, and was offering to sell $9 million worth of Airbnb Series C shares. The shares didn’t exist.
Airbnb had announced plans to go public in 2019, but the Covid pandemic delayed its debut. Shortly after Rafiq first spoke with the investment bank, in August 2020, reports surfaced of Airbnb’s plan to confidentially file for an IPO. Four days after those reports, the unnamed investment bank agreed to buy the fictitious shares and wired $9 million to an escrow account.
Airbnb ultimately held its IPO in December and saw its stock rocket 112% in its opening day.
Prosecutors first announced charges of securities fraud, wire fraud and identity theft against Rafiq in 2021. He’d committed almost the same crime two decades earlier, when he was convicted for trying to sell pre-IPO shares of Google.
Inner City Press, a news outlet that covers the Southern District of New York, first reported that Rafiq had been detained in January, following his extradition from Singapore.
“Shamoon Rafiq exploited investors’ fear of missing out on the potential gains to be earned from investing in companies before they go public, and solicited millions of dollars from investors through brazen lies and deception,” U.S. Attorney Audrey Strauss said in a statement at the time of the 2021 charge.
The bank froze the $9 million in escrow funds and contacted the unnamed family office through a “trusted intermediary,” according to prosecutors. The family office’s legal counsel reported the scheme to law enforcement shortly after it was informed, according to the complaint.
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Technology
Amazon was questioned by House China committee over ‘dangerous and unwise’ TikTok partnership
Amazon logo on a brick building exterior, San Francisco, California, August 20, 2024.
Smith Collection | Gado | Archive Photos | Getty Images
Amazon representatives met with the House China committee in recent months to discuss lawmaker concerns over the company’s partnership with TikTok, CNBC confirmed.
A spokesperson for the House Select Committee on the Chinese Communist Party confirmed the meeting, which centered on a shopping deal between Amazon and TikTok announced in August. The agreement allows users of TikTok, owned by China’s ByteDance, to link their account with Amazon and make purchases from the site without leaving TikTok.
“The Select Committee conveyed to Amazon that it is dangerous and unwise for Amazon to partner with TikTok given the grave national security threat the app poses,” the spokesperson said. The parties met in September, according to Bloomberg, which first reported the news.
Representatives from Amazon and TikTok did not immediately respond to CNBC’s request for comment.
TikTok’s future viability in the U.S. is uncertain. In April, President Joe Biden signed a law that requires ByteDance to sell TikTok by Jan. 19. If TikTok fails to cut ties with its parent company, app stores and internet hosting services would be prohibited from offering the app.
President-elect Donald Trump could rescue TikTok from a potential U.S. ban. He promised on the campaign trail that he would “save” TikTok, and said in a March interview with CNBC’s “Squawk Box” that “there’s a lot of good and there’s a lot of bad” with the app.
In his first administration, Trump had tried to implement a TikTok ban. He changed his stance around the time he met with billionaire Jeff Yass. The Republican megadonor’s trading firm, Susquehanna International Group, owns a 15% stake in ByteDance, while Yass has a 7% stake in the company, NBC and CNBC reported in March.
— CNBC’s Jonathan Vanian contributed to this report.
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Former U.S. Army intelligence analyst Chelsea Manning says censorship is still “a dominant threat,” advocating for a more decentralized internet to help better protect individuals online.
Her comments come amid ongoing tension linked to online safety rules, with some tech executives recently seeking to push back over content moderation concerns.
Speaking to CNBC’s Karen Tso at the Web Summit tech conference in Lisbon, Portugal, on Wednesday, Manning said that one way to ensure online privacy could be “decentralized identification,” which gives individuals the ability to control their own data.
“Censorship is a dominant threat. I think that it is a question of who’s doing the censoring, and what the purpose is — and also censorship in the 21st century is more about whether or not you’re boosted through like an algorithm, and how the fine-tuning of that seems to work,” Manning said.
“I think that social media and the monopolies of social media have sort of gotten us used to the fact that certain things that drive engagement will be attractive,” she added.
“One of the ways that we can sort of countervail that is to go back to the more decentralized and distribute the internet of the early ’90s, but make that available to more people.”
Nym Technologies Chief Security Officer Chelsea Manning at a press conference held with Nym Technologies CEO Harry Halpin in the Media Village to present NymVPN during the second day of Web Summit on November 13, 2024 in Lisbon, Portugal.
Horacio Villalobos | Getty Images News | Getty Images
Asked how tech companies could make money in such a scenario, Manning said there would have to be “a better social contract” put in place to determine how information is shared and accessed.
“One of the things about distributed or decentralized identification is that through encryption you’re able to sort of check the box yourself, instead of having to depend on the company to provide you with a check box or an accept here, you’re making that decision from a technical perspective,” Manning said.
‘No longer secrecy versus transparency’
Manning, who works as a security consultant at Nym Technologies, a company that specializes in online privacy and security, was convicted of espionage and other charges at a court-martial in 2013 for leaking a trove of secret military files to online media publisher WikiLeaks.
She was sentenced to 35 years in prison, but was later released in 2017, when former U.S. President Barack Obama commuted her sentence.
Asked to what extent the environment has changed for whistleblowers today, Manning said, “We’re at an interesting time because information is everywhere. We have more information than ever.”
She added, “Countries and governments no longer seem to invest the same amount of time and effort in hiding information and keeping secrets. What countries seem to be doing now is they seem to be spending more time and energy spreading misinformation and disinformation.”
Manning said the challenge for whistleblowers now is to sort through the information to understand what is verifiable and authentic.
“It’s no longer secrecy versus transparency,” she added.
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