A former executive at Abraaj Group pleaded guilty to conspiracy charges and agreed to cooperate with a U.S. probe of a scheme that helped lead to the world's biggest private-equity insolvency in 2018.
Mustafa Abdel-Wadood, a former managing partner at the Dubai-based firm, appeared in U.S. District Court in Manhattan on Friday to admit he lied to investors across the globe in an attempt to hide losses at Abraaj and raise more money. He's one of six former Abraaj executives facing racketeering and securities-fraud charges following an investigation by New York prosecutors.
The 49-year-old with Egyptian and Maltese citizenships was arrested in April in New York while on a college-shopping trip with his wife and son. Since then, he has been confined to his home in New York and subject to a $10 million bond. Mr. Abdel-Wadood is the only defendant to appear in court in the U.S.
"I knew at the time that I was participating in conduct that was wrong," he told the court, reading slowly from a prepared statement and at times choking back tears. "I ended up drifting from who I really am. For that, I am ashamed."
At the hearing, U.S. Magistrate Gabriel Gorenstein said Mr. Abdel-Wadood had agreed to cooperate with prosecutors as part of a plea agreement. He said he understood that he could be sentenced to 125 years in prison if all the terms for each charge were served consecutively.
Abraaj, which was founded in 2002 and managed almost $14 billion, was the Middle East's biggest private equity fund and one of the world's most influential emerging-market investors with stakes in health care, clean energy, lending and real estate across Africa, Asia, Latin America and Turkey. It was forced into liquidation after investors including the Bill & Melinda Gates Foundation, commissioned an audit.
Mr. Abdel-Wadood, who worked at the firm from 2006 to 2018, was charged alongside Arif Naqvi, the founder and ex-chief executive officer. Four other former executives were also charged — Chief Financial Officer Ashish Dave and managing directors Sivendran Vettivetpillai, Rafique Lakhani and Waqar Siddique. Mr. Naqvi gave up control of the firm last year after it was disclosed that revenue hadn't covered operating costs for years.