Daijiworld Media Network - Brooklyn
Brooklyn, Apr 20: A technology company that once promoted itself as an advanced artificial intelligence platform has collapsed after investigators uncovered a large-scale financial fraud involving fabricated revenues, fake customers, and circular money transfers.
iLearning, founded in 2010 and dissolved in 2025, allegedly misled investors and lenders for years by inflating financial statements and presenting fictitious commercial contracts. The company was led by Puthugramam “Harish” Chidambaran, its founder and former CEO, and Sayyed Farhan Ali “Farhan” Naqvi, its former CFO, both of whom were arrested on April 17 and produced before a US court.
According to court filings, the accused exploited investor enthusiasm during the global AI boom, portraying a highly successful business built on “out-of-the-box” artificial intelligence solutions. However, prosecutors allege that the company’s reported customers and revenues were largely fictitious. US Attorney Nocella described the scheme as one where “the truly artificial part of the story was its customers and revenues.”
The company claimed its earnings came primarily from licensing its software platform, reporting explosive growth that allegedly reached $421 million in revenue by 2023. In April 2024, iLearning transitioned into a publicly traded entity and raised $40 million in loans from a New York-based financial institution, followed by another $20 million from a separate branch. Soon after going public, it was listed on the NASDAQ under the ticker “AILE,” reaching a market valuation of about $1.5 billion.
Investigators, however, found that the financial success was entirely fabricated. Many of the so-called customer agreements were allegedly signed by individuals linked to the accused, including family members. A detailed scheme outlined in court documents revealed that at Chidambaran’s direction, a former company associate created multiple fake customer entities and opened bank accounts in their names. Millions of dollars were then transferred from iLearning to these accounts, routed through a series of controlled entities, and eventually cycled back to the company itself. These “round-trip” transactions reportedly exceeded $144 million, designed to simulate genuine business revenue.
The fraud began to unravel in 2024 when an investment research firm published a report alleging revenue manipulation. The disclosure triggered a sharp decline in the company’s stock value and eroded investor confidence. By December 2024, iLearning had filed for Chapter 11 bankruptcy in the District of Delaware. The case was later converted into Chapter 7 liquidation in 2025, effectively marking the end of the company and its operations.