Chief Executive Arif Naqvi, a former Pakistani bureaucrat, was arrested in the United Kingdom, while managing partner Mustafa Abdel-Wadood was arrested in New York on Thursday, Assistant US Attorney Andrea Griswold said at a hearing in Manhattan federal court.
Abdel-Wadood appeared before the court on Thursday's hearing and pleaded not guilty. His lawyer did not immediately requested bail for his client saying that he needed more time to study the case.
US Attorney Griswold said that the US would want to have Naqvi extradited. Both Naqvi and Abdel-Wadood are charged with fraud and conspiracy.
Abraaj had been the largest buyout fund in the Middle East and North Africa. It collapsed in May after investors including the Bill and Melinda Gates Foundation raised concerned over the firm's management of $1billion health funds.
Prosecutors claimed that since 2014, the firm lied about the performance of their funds, inflating them to twice as much as they were in reality. Moreover, they claimed that both Naqvi and Abdel-Wadood caused 'hundreds of millions' of investor funds to be misappropriated.
Abraaj had been the largest buyout fund in the Middle East and North Africa until it collapsed last May
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