Twins Busted for Swindling $2 Million in Investment Scam

By Evan Mantyk
Evan Mantyk
Evan Mantyk
Evan Mantyk is an English teacher in New York and President of the Society of Classical Poets.
December 29, 2009 Updated: December 29, 2009

NEW YORK—Twenty-eight-year-old twin brothers Makara Nkhereanye and Tsele Nkhereanye, were arrested on Tuesday for stealing over $2 million from more than 30 victims in a securities scheme, according to Manhattan District Attorney Robert Morganthau’s office.

The Ivy League-educated twins swindled their victims by falsely claiming 10 percent -15 percent profits and paying them out with the victims’ own principal.

“By and large their victims had little familiarity with the stock market. They included firefighters, construction workers, a plumber, a chef, a postal worker, a grocery store manager, and property managers,” according to the DA’s office. “To those victims, the Nkhereanye brothers said that they were investing in low value stocks and led them to believe that these were safer stocks. In reality, the Nkhereanye brothers conducted trades primarily in ‘penny stocks,’ a highly volatile type of stock investment.”

Makara, a Princeton University graduate, and Tsele, who attended Stanford University, began trading in an account held by Makara and their mother at Fidelity Investments in April 1999.

The twins started by investing a friend’s money and then claimed to make significant returns that were actually being paid out of the friend’s principal. The bogus example was then used to encourage more friends and acquaintances to invest their money. Soon the brothers were issuing written statements and signing agreements guaranteeing 10 percent -15 percent a month in returns with no loss on principal.

When one of their victims requested an account statement, they forged a Fidelity statement to show profits. In February 2009, Fidelity smelled something fishy and closed the brothers’ account. The brothers opened a new account at TD Ameritrade and continued their fraud.

“However, by that point, their scheme was beginning to collapse as they were increasingly unable to continue to pay phony returns to their victims,” said the DA’s office.

Their last ditch effort in March 2009 was to convince some of their victims that they had a new opportunity to invest in gold and make a 100 percent return. This led to some additional investments but nothing that could save them in the end.

Evan Mantyk
Evan Mantyk is an English teacher in New York and President of the Society of Classical Poets.