Over the last year, investors have been receiving attractive offers of shares in some of the world’s hottest tech companies: Airbnb, Lyft, Palantir and Uber. New York-based Knightsbridge Private Partners claimed to have “pre-initial public offering” shares to shift ahead of the IPOs at those multibillion valued businesses.
But the stocks were entirely imaginary, and multiple investors were duped into paying $2.1 million for them in just four months between October 2018 and January 2019, according to a court filing unearthed by Forbes. That document detailed Bank of America’s seizures of more than $100,000 related to Knightsbridge’s alleged fraud.
One of the fraudsters’ targets, an 86-year-old investor from Alabama, told the FBI he’d been called by two brokers at Knightsbridge who were offering pre-IPO Uber shares in October 2018. They had proposed $62.00 per share, he agreed and handed over $125,000 for 2,000 shares, he told law enforcement, and Knightsbridge sent over documentation as proof of his apparent ownership of Uber shares. One of the brokers called him again in January, offering Airbnb shares, but he didn’t have the funds to invest at that time.
The investor never had any Uber shares, investigators believe, after they spoke with the affected tech companies, who confirmed Knightsbridge never owned any stock. Uber went public on the New York Stock Exchange in May this year, raising $8.1 billion in the process.
Search warrants for Knightsbridge’s accounts showed it had been successful in convincing others to invest. An October 16, 2018 check for $15,750 contained a memo line that read “Lyft 250 shares @ $63.00 each.” An October 17, 2018 check for $197,130 contained the line “10,000 Shares IPO Palantir.” Lyft went public in March. Though reportedly thinking of an IPO, the Peter Thiel-backed Palantir is yet to file.
There’s little more information on the case. Forbes could not find any individuals who’d been charged for the scheme, and the DOJ hadn’t responded to a request for comment at the time of publication.
Prosecutors said the fraudsters created websites to help perpetrate their crime, but didn’t list any sites.
A Google Street View image of a Knightsbridge address from October 2018 shows a small, red brick building with a Mercedes Benz parked outside. It appears the property used to be a childcare center called Alphabetland. Forbes could find no contact details for Knightsbridge, which is registered in Delaware. The DOJ also listed an associated business, Axe Marketing, though it didn’t say what the organization did.
While the $2.1 million is a significant score for such a fraud, criminals have targeted investors with such scams before. In 2018, UBS warned that it had received more than 60 reports of fake emails purporting to come from the famous financial firm, encouraging recipients to buy Airbnb stock before its IPO. Airbnb announced in September its plans for a IPO in 2020.