The $1.4 Billion AI Company Whose Biggest Customers Were Fake

In April 2024, iLearningEngines walked onto the Nasdaq worth $1.4 billion, selling itself as the next big AI story: "human-in-the-loop" software that automated corporate training and compliance work. Four months later, a short-seller called the whole thing largely fake. Federal prosecutors now agree. An April 2026 indictment alleges founder Harish Chidambaran and CFO Farhan Naqvi ran a scheme from January 2019 through April 2025, fabricating customer contracts through shell companies and inflating reported revenue — in some periods, prosecutors say, by more than 90%. One alleged customer, described to investors as one of the company's three biggest and supposedly worth $50 million a year, allegedly had no real business behind it at all. Hindenburg Research's August 2024 short-seller report wiped roughly 54% off the stock in a single day. The company filed for Chapter 11 bankruptcy protection on December 20, 2024; both executives resigned three days later. And in April 2026, the U.S. Attorney's Office for the Eastern District of New York indicted both men on 10 counts, including operating a continuing financial crimes enterprise — a charge carrying a mandatory minimum of 10 years, and up to life in prison if convicted. Neither has pleaded guilty. Both are presumed innocent unless and until proven guilty in a court of law. This video breaks down how the alleged fraud worked, how a $1.4 billion "AI unicorn" unraveled, and where the case stands today. 00:00 Cold Open 02:37 The Unicorn 04:32 The Customers 06:41 The Collapse 08:38 The Indictment 10:48 Closing Sources: DOJ EDNY press release · federal indictment and court filings · Hindenburg Research report (Aug 2024) · CFO Dive · Hoodline · Renaissance Capital SPAC data (full list in script file) 📖 The Attention Economy — How Creators, Platforms, and Capital Are Rewriting the Rules of Business https://www.amazon.com/dp/B0H3TG82K9 📌 Disclaimer: This content is produced for educational and informational purposes only and does not constitute financial, investment, or legal advice. All facts are sourced from publicly available DOJ and SEC…