The Amogh Karney fraud case centers on a former Omaha financial advisor who invented a fake investment fund called ARK Capital, LLC, took $75,000 from a single investor in 2019, and was permanently barred from the securities industry by the U.S. Securities and Exchange Commission in 2021. A related civil lawsuit later produced a $2,201,385.82 default judgment against his parents over a much larger real estate investment scheme, which the Nebraska Supreme Court affirmed in June 2025.
The ARK Capital Fabrication
In April 2019, Karney was working out of a Northwestern Mutual Investment Services branch in Omaha, where he had been associated with the firm as a registered representative since May 2016.1SEC.gov. In the Matter of Amogh Karney, Release No. 34-91026 He approached an investor identified in state records only as “CJ” and pitched a $75,000 stake in what he called ARK Capital, LLC. He described it as an investment fund he had been running for two years, said earlier investors had already gotten their money back with profits, and named a prominent local business owner as a repeat participant.2Nebraska Department of Banking and Finance. Order to Cease and Desist – Amogh Karney
Nebraska investigators found that none of that was true. ARK Capital, LLC had never been filed with the Nebraska Secretary of State and did not exist. The businessman Karney named had no connection to him and had never invested a dollar. Karney told the investor to wire the $75,000 to his personal account at Bank of the West.2Nebraska Department of Banking and Finance. Order to Cease and Desist – Amogh Karney
Karney was never registered with the Nebraska Department of Banking and Finance as a broker-dealer agent, though he did hold a Nebraska insurance producer license through Northwestern’s affiliated insurance company.2Nebraska Department of Banking and Finance. Order to Cease and Desist – Amogh Karney
Nebraska Cease and Desist
The Nebraska Department of Banking and Finance issued a cease and desist order against Karney on February 26, 2020. The agency concluded that the membership interests he offered in ARK Capital were securities under Nebraska law and that he had violated Nebraska Revised Statute ยง 8-1102(1)(b), the state’s antifraud provision, by making untrue statements of material fact in the sale of securities.2Nebraska Department of Banking and Finance. Order to Cease and Desist – Amogh Karney Karney did not request a hearing, and the order became final on March 20, 2020.1SEC.gov. In the Matter of Amogh Karney, Release No. 34-91026
The SEC Industry Bar
On February 1, 2021, the SEC issued Release No. 34-91026 (Administrative Proceeding File No. 3-20215), barring Karney from the securities industry. The order was based on the finalized Nebraska cease and desist and was brought under Section 15(b) of the Securities Exchange Act and Section 203(f) of the Investment Advisers Act.1SEC.gov. In the Matter of Amogh Karney, Release No. 34-91026
The bar is broad. Karney is permanently prohibited from associating with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization. He is also barred from participating in any penny stock offering in any capacity.1SEC.gov. In the Matter of Amogh Karney, Release No. 34-91026 He was 25 years old and living in Kansas City, Missouri at the time.
The Federal Criminal Case
A federal grand jury in the District of Nebraska returned an indictment against Karney on January 17, 2024, in United States v. Karney, Case No. 8:24-cr-00018. The indictment was unsealed on February 2, 2024.3PACER Monitor. USA v. Karney
The case never reached trial. The government moved to dismiss on May 20, 2024, and Judge Brian C. Buescher granted the motion the following day, dismissing the indictment without prejudice. That leaves open the possibility that prosecutors could refile charges later. The docket does not explain the government’s reason for seeking dismissal, and subsequent activity has been limited to transcript requests.4CourtListener. United States v. Karney
The Family Civil Case: Bajjuri v. Karney
A separate civil action alleged a much larger scheme. In February 2022, investors Pranay Bajjuri, Nirmal Gorla, and Sathwik Madishetti, along with two investment entities, Terraland Holdings, LLC and SSRRW, LLC, sued Amogh Karney, his parents Anand and Sudha Karney, and four related entities: Sarkit, Inc., Shiba Prop LLC, Narke Holdings LLC, and Ark Capital Brookside LLC.5FindLaw. Bajjuri v. Karney, No. S-24-409
The complaint alleged unjust enrichment, fraud, and civil conspiracy. According to the plaintiffs, the defendants induced them to invest in LLCs that were supposed to purchase and operate rental properties, then diverted the money for personal use. The plaintiffs alleged that Anand Karney executed at least five different operating agreements for Shiba Prop LLC in a short span in order to muddy ownership interests and cut the investors out of their promised membership stakes. Records showed that ownership interests in six properties had been inflated: the defendants claimed $2,518,626.26 in net equity when actual investment was only $274,520.70.5FindLaw. Bajjuri v. Karney, No. S-24-409
Discovery Sanctions and Default
The case did not resolve on the merits. Judge Shelly R. Stratman ordered the Karneys to produce financial and organizational documents by July 18, 2023. Their responses were incomplete, omitting known communications with financial institutions and co-defendants and failing to address eight specific document requests.6Vlex. Bajjuri v. Karney, 319 Neb. 273
After an evidentiary hearing in November 2023, the district court found that Anand and Sudha Karney had “frustrated the discovery process at every stage of litigation” and shown “repeated discovery violations and inexcusable recalcitrance.” The court entered a default judgment against Anand Karney, Sudha Karney, and Sarkit, Inc. for $2,201,385.82, plus $180,645.68 in attorney fees and statutory interest, and held the Karneys jointly and severally liable under a civil conspiracy theory. Sarkit, Inc. separately reached a settlement and waived its appellate rights.5FindLaw. Bajjuri v. Karney, No. S-24-409
The Nebraska Supreme Court Ruling
Anand and Sudha Karney appealed, arguing the sanctions were unwarranted, that they were not at fault for the discovery failures, that they lacked control over the requested documents, and that they had not been adequately warned a default could be imposed. On June 20, 2025, the Nebraska Supreme Court rejected each argument and affirmed the district court in full.5FindLaw. Bajjuri v. Karney, No. S-24-409
The court reviewed the sanctions for abuse of discretion and found none. It noted that under Nebraska law, LLC members and managers have the legal right to obtain their companies’ records and that the Karneys had never shown an inability to produce them. The court cited the parents’ “inexcusable recalcitrance” and pointed out they had been warned about sanctions as early as March 2023. The $2,201,385.82 judgment and $180,645.68 in fees stand.6Vlex. Bajjuri v. Karney, 319 Neb. 273
Where Things Stand
Amogh Karney remains permanently barred from the securities industry under the SEC’s 2021 order. The federal criminal indictment against him was dismissed without prejudice in May 2024, so prosecutors retain the option to refile. The $2.2 million civil judgment against his parents, Anand and Sudha Karney, is final following the Nebraska Supreme Court’s June 2025 affirmance.