Federal prosecutors in New York have unsealed an indictment charging three executives with conspiracy and securities fraud related to an alleged scheme to inflate company revenues. The defendants are Anil Mathews, former CEO of Near Intelligence, Inc. (“Near”); Rahul Agarwal, former CFO of Near; and Kenneth Harlan, CEO of MobileFuse LLC (“MobileFuse”).
According to the indictment, Mathews and Agarwal orchestrated a series of transactions from 2021 through December 2023 designed to overstate Near’s revenue by about $25 million. The scheme allegedly involved “round trip” payments between Near and MobileFuse: Near made inflated payments to MobileFuse, which then returned the funds to Near, allowing the latter to report artificially high revenues on its financial statements.
“As alleged, executives from Near and MobileFuse ran a circular payment scheme to inflate revenue and increase Near’s value,” said U.S. Attorney Jay Clayton. “Our investors, businesses and employees depend on the integrity of our capital markets. Market integrity is one of America’s great competitive advantages, and this Office will hold those who undermine that essential integrity to account.”
“These defendants not only allegedly recycled more than $25 million through each other’s businesses, but two of them also stole even more funds to maintain their personal lifestyles,” said FBI Assistant Director in Charge Christopher G. Raia. “These defendants allegedly manipulated their executive positions within their respective companies to create a mirage of financial success and attract prospective buyers. The FBI is determined to apprehend any individual who relies on fraudulent misrepresentations to improve their economic portfolio.”
The indictment details that the round-tripping began before Near became a public reporting company and was intended in part to make it appear more attractive for acquisition by a Special Purpose Acquisition Company (SPAC). This led to revenue figures being overstated by as much as 28 percent at certain times—particularly just before Near went public via SPAC merger in March 2023.
After going public on Nasdaq around March 24, 2023, the scheme began unraveling when Near announced on October 5 that its revenue may have been overstated and its financial statements should not be relied upon. The company filed for bankruptcy less than nine months after completing its merger with the SPAC.
In addition to the accounting fraud allegations, Mathews and Agarwal are accused of embezzling funds from Near for personal benefit. Mathews allegedly used fake invoices tied to stolen identities to pay rent for a luxury home in Laguna Beach, California. Agarwal is accused of transferring over $1 million from Near into his own Singaporean company and facilitating further cover-ups using fraudulent documentation.
Mathews was previously arrested in France where he had fled during the investigation; U.S. authorities are seeking his extradition. Agarwal remains at large in India while Harlan was arrested earlier today and is scheduled for an initial court appearance before U.S. Magistrate Judge Robert W. Lehrburger.
The Justice Department’s Office of International Affairs is handling extradition matters related to this case.
Mr. Clayton praised the work of the FBI and thanked the U.S. Securities and Exchange Commission for its assistance.
The prosecution is being handled by Assistant U.S. Attorneys Nicholas Chiuchiolo and Allison Nichols from the Securities and Commodities Fraud Task Force.
All charges contained in the indictment are allegations; defendants are presumed innocent unless proven guilty in court.
