DOJ indicted iLearningEngines CEO and CFO for faking up to 90% of the AI company's revenue for six years

The AI Company Said It Had Revenue. The DOJ Says 90% of It Was Fabricated.

iLearningEngines presented itself as an enterprise AI company with strong financials. It went public. It attracted investors. Its SEC filings reported revenue growth across six consecutive years. According to the Department of Justice, up to 90% of that revenue was invented.

The Indictment

In April 2026, the DOJ unsealed a 10-count indictment against CEO Harish Chidambaran and CFO Farhan Naqvi. The charges allege that from 2019 to 2025, the two executives fabricated customer contracts, inflated revenue by "hundreds of millions of dollars a year," and produced financial statements that bore little relationship to actual business operations. Debevoise & Plimpton's data blog identified the case as the DOJ's first major prosecution specifically targeting fraud in the AI sector.

Bankruptcy With $50M Outstanding

The company filed for bankruptcy. When it did, it carried $50 million in unpaid liabilities to real creditors — vendors, employees, and counterparties who had transacted with a company whose books were largely fictional. Investors who bought shares based on the reported revenue figures lost the value of those positions.

The DOJ Signal

Debevoise analysts noted that the DOJ's public framing of the case was deliberate: prosecutors described AI as a "priority" sector for fraud enforcement in 2026. The message is aimed at a market where companies routinely command premium valuations based on AI revenue projections that are difficult for investors to verify independently.