Prosecutors Say FiDi Fraudster Bilked Victims out of $800,000+
Federal prosecutors allege that a con man running an investment fraud from an apartment in the Financial District bilked gullible victims out of more than $800,000. According to court documents filed by the U.S. Attorney for the Southern District of New York and by the federal Securities and Exchange Commission, Kenneth Thom, aged 41, began operating multiple websites and social media accounts under the pseudonyms “K Money” and “K$” in February, 2024.
One of these websites, www.KMoneyGroup.com, is still active, and gives the firm’s corporate address as 110 Wall Street, a former office building near the East River waterfront that was converted into apartments in 2015. That site waxes rhapsodic about “the fast-paced arena of financial markets, where fortunes are made and lost in the blink of an eye,” and touts “a luminary whose name resonates with unparallelled expertise and wisdom.” In addition to misspelling the word “unparalleled,” the site displays a photograph that federal charging documents describe as “a mysterious looking, computer-generated image of a person wearing a Venetian mask and a golden robe, studying financial data on a monitor.”
“Known to most as K$, a former Wall Street market maker who has transcended the bustling trading floors to become the beacon of knowledge, guiding and shaping the destinies of the world’s most elite traders,” the site continues, alluding to “an illustrious career that has weathered market storms and conquered financial peaks.”
In fact, Mr. Thom’s investment career appears to have been somewhat less than illustrious. After passing a pair of licensing exams in 2006, he worked for five brokerage firms over a period of two years. In 2008, the Financial Industry Regulatory Authority (FINRA) found him liable for breach of fiduciary duty, misrepresentation, fraud, and deception, and ordered him to return $38,902 to a former client who claimed to have been cheated. FINRA says that Mr. Thom never paid this money, and that he has been banned from acting as an investment advisor or broker ever since.
Apart from not knowing the actual name of the person to whom they were entrusting their money, much less whether “K$” was licensed as an investment advisor or broker, there were other warning signs that a skeptical investor might have perceived as red flags. Mr. Thom’s terms for prospective clients were that they had to give him “free rein to trade anything I want, whenever I want,” and that they send him money in increments of less than $10,000, “to avoid the IRS flagging it.” Additionally, he demanded 50 percent of any profits he earned with the funds supplied by his customers (“to cover the work and taxes”), which is more than double what even the most successful hedge funds charge.
But the KMoneyGroup.com site assured investors that, “Mr. K$ has now taken on a new mission: to unlock the secrets of his success and bestow them upon a select group of traders eager to ascend to greatness. In the hallowed halls of his teachings, the world’s finest traders gather to harness the power of his insights and shape their own legacies in the thrilling world of finance. Welcome to the realm of K$ Group, where mastery meets mentorship, and the pursuit of excellence knows no bounds.”
Actually, the pursuit of excellence appears to have known quite a few bounds. A criminal indictment alleges that less than half of the $800,000 Mr. Thom received from 67 investors was ever invested. With the roughly $350,000 that he used for trading securities, Mr. Thom racked up losses of slightly more than 73 percent (in excess of $250,000). Much of the rest appears to have been spent on trips to Tokyo and last year’s Paris Summer Olympics, Airbnb rentals, shopping sprees at Hermes, frequent flights to Europe on La Compagnie (a luxury, boutique carrier that flies between Newark and various European destinations), and splurges like a $1,600 dinner at a Korean barbecue restaurant. More prosaically, the charging documents note, Mr. Thom spent “thousands of dollars on everyday expenses like gas, the New York City subway, and groceries.”
This cycle was sustained for more than a year, federal prosecutors claim, by Mr. Thom sending false statements to his investors, containing fictional account balances. The scheme began to unravel when Mr. Thom changed one of his online pseudonyms to AYBABTU (an acronym for the Internet meme, “all your base are belong to us”), which seems not to have inspired confidence among his investors. As redemption requests poured in, Mr. Thom began erecting hurdles to withdrawing money from the funds he operated, such as telling customers that they had to complete various forms, or claiming that social media platforms had temporarily blocked his accounts.
Prosecutors allege that last January, when one investor messaged Mr. Thom that “people were worried about their money, Thom said that he was in Japan ‘dealing with the aftermath of the earthquake’ and did not want to hear about worried investors when he was ‘dealing with situations.’ In fact, there are no reports of an earthquake in Japan in January, 2025 that caused any significant damage or injuries. Rather than ‘dealing with’ a natural disaster, Thom was on an international jaunt using stolen investor funds.” Shortly after this exchange of messages, Mr. Thom stopped replying to investors.
In August, Mr. Thom was arrested by the FBI agents, and charged with one count of securities fraud, which carries a maximum sentence of 20 years in prison, and one count of investment adviser fraud, which carries a maximum sentence of five years. Shortly afterward, he was released on a $750,000 personal recognizance bond, pending trial. His lawyer did not respond to a request for comment.