DURHAM, N.C. (WNCN) — A Durham man has pleaded guilty to a $9.5 million investment fraud scheme.

The announcement came from Sandra J. Hairston, United States Attorney for the Middle District of North Carolina.

According to court documents, between July 2022 and June 2023, Nayeem Choudhury, 27, solicited investments for his company, Dream Venture Capital Group. Hairston’s office said the group was marketed as a fund that traded in option contracts.

Prosecutors said Choudhury raised $9.5 million from investors and induced victims to invest by promising high rates of return and telling victims that they could invest their capital with no risk. They said he also falsely represented to investors that Dream Venture was profitable and that it had a proven track record of successfully trading options.

In reality, the U.S. Securities and Exchange Commission said Choudhury’s track record consisted almost uniformly of monthly six- and seven-figure trading losses. The commission said Dream Venture lost about $5 million in options trading between Aug. 2022 and June 2023.  

Choudhury is accused of misusing investor funds by using new investor money to repay existing investors and paying personal expenses out of fund assets, including purchasing an $85,000 Mercedes Benz. Since July 2022, the SEC claims that Choudhury and Dream Venture have only repaid investors about $3.5 million.

Choudhury is scheduled to be sentenced on March 21 in Winston-Salem. He faces a maximum sentence of 20 years in prison, a period of supervised release of up to three years, restitution, and other monetary penalties.