CHICAGO -- As the man who bilked him and hundreds of others out of millions of dollars stood before a federal judge Monday to plead guilty, Nadeem Sharafi turned to another victim who had come to the court hearing.
Sharafi shook the man's hand forcefully, a smile spreading over his face.
But with two co-defendants still on the run and so much money gone, Amjed Mahmood's guilty plea provided limited relief for Sharafi and other victims.
"When you've lost your life savings and you see him walking around, that doesn't feel really right," said Gazi Alam, who said he lost $260,000 in a scam allegedly organized by Mahmood, who remains free on bail.
The Ponzi scheme stunned Chicago's Islamic community. Prosecutors say Mahmood, Salman Ibrahim and Mohammad Zahid preyed on Muslims by telling them their investments followed Islamic law that puts restrictions on certain investments.
"That is the only reason we invested," Alam said. "We were looking to invest in a safe and pure way."
Mahmood, who is cooperating with the government in the investigation, pleaded guilty to wire, bank and mail fraud. No sentencing date was set. Ibrahim and Zahid are fugitives, according to court documents.
The three allegedly used a company called Sunrise Equities, co-founded by Mahmood in 200, to steal money from investors who thought they were buying into real-estate deals.
Sunrise's investments were endorsed by religious scholars on a Chicago-based Shariah Board, which provides guidance to conservative Muslims on following Islamic law.
"Through this Ponzi scheme, Mahmood and his co-defendants fraudulently obtained over $40 million from more than 300 investors," the plea agreement said.
While Sunrise promised investors that their money would be invested in only real estate, some of it was used to invest in other ventures, including a motorcycle parts manufacturing company in Pakistan and a gas station in suburban Chicago, according to the plea agreement. Mahmood also used some of the money to pay for his own condominium, the document said.
Salman Azam, a private attorney, has counseled several Sunrise investors since their payments stopped and the company offices abruptly closed in 2008.
"The guilty plea shows a first step in holding someone accountable," Azam said. "They targeted a very working-class, blue-collar crowd who was religious. . . . Bringing them to justice might be the only justice the victims are going to get."
Mahmood faces up to five years in prison and a $250,000 fine. A judge could order further restitution to the victims, but Azam said he is uncertain how much, if any, money from Sunrise Equities or the defendants could be recovered.
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