Ismail J. Ramsey, U.S. Attorney | U.S. Attorney for the Northern District of California
Shaukat Shamim, a Silicon Valley start-up founder, received a 30-month prison sentence for defrauding investors, according to an announcement by Acting United States Attorney Patrick D. Robbins and FBI Special Agent in Charge Sanjay Virmani. U.S. District Judge James Donato delivered the sentence on April 7.
Shamim, aged 53 and a resident of Santa Clara, California, admitted to his actions and pleaded guilty to securities fraud on September 16, 2024. He founded YouPlus, a technology start-up focusing on artificial intelligence tools for video content analysis, in 2013. The company raised approximately $17 million from investors under his leadership.
Shamim confessed to misleading investors about YouPlus’s product capabilities, sales figures, and customer base. He falsely asserted that YouPlus had developed a search engine utilizing neural networks, while the tasks were manually performed by employees. Furthermore, Shamim presented false revenue figures and customer data, indicating non-existent recurring service subscriptions.
By February 2019, Shamim falsely claimed that YouPlus had substantial earnings, overstating revenues for 2018 and early 2019. Facing financial difficulties, he sought further investment while providing altered bank statements and forged documents to conceal the truth.
An indictment in June 2022 charged Shamim with wire fraud and securities fraud. He pleaded guilty to securities fraud, and the court dismissed the remaining charges at sentencing. Apart from the prison term, Shamim must pay a $50,000 fine and serve three years of supervised release after imprisonment. He remains on bond until he reports to prison on April 28, 2025. A restitution hearing is set for June 23, 2025.
The prosecution, led by Assistant U.S. Attorneys Lloyd Farnham and Noah Stern, follows an FBI investigation with support from the SEC. An SEC civil enforcement action against Shamim is ongoing.
