Former YouPlus CEO Shaukat Shamim Presented False Financial and Product Information to Raise Money for his Artificial Intelligence Startup
April 13, 2025 – SAN FRANCISCO, CA – Shaukat Shamim was sentenced to 30 months in federal 
prison in connection with his scheme to defraud investors into investing in the technology start-up he founded and led, announced Acting United States Attorney Patrick D. Robbins and FBI Special Agent in Charge Sanjay Virmani. The sentence was handed down April 7 by the Hon. James Donato, U.S. District Judge.
Shamim, 53, of Santa Clara, Calif., pleaded guilty to the charges on September 16, 2024. According to agreed facts in the plea agreement, Shamim founded Silicon Valley-based YouPlus in 2013. By 2015, the focus of YouPlus was to develop artificial intelligence software tools to analyze online video content. From its inception until Shamim resigned from the company in November 2019, YouPlus raised approximately $17 million from investors, including angel investors and venture capital firms.
Shamim admitted that he made false representations to investors and potential investors about YouPlus’s product, sales, and customer adoption. For example, Shamim told investors that YouPlus had developed a search engine that used neural networks to analyze videos and predict marketing outcomes despite knowing that YouPlus had not, in fact, developed software with fully operational artificial intelligence functionalities. Instead, to perform pilot projects or marketing studies, YouPlus had employees in India manually review videos and then create PowerPoint presentations with marketing insights. Shamim also admitted to investors and prospective investors about YouPlus’s revenue and customers. Shamim admitted that, in August and September 2018 he prepared and provided to prospective investors documents that claimed that YouPlus had customers who had signed up for continuing services and paid recurring subscription fees. In fact, no customers had signed on to pay monthly fees for the service. Shamim provided some victims a spreadsheet that showed 90 customers were paying a total of $600,000 per month. Nevertheless, in reality, every one of the purported customers were paying for YouPlus subscriptions and YouPlus had only ever earned minimal revenue—less than $200,000 total—working on small and non-recurring projects.
In February 2019, Shamim told investors that Youplus had earned $4.6 million in revenue in the year 2018, when in fact its revenue was less than $100,000 that year. In May 2019, Shamim falsely claimed that YouPlus had earned $3.5 million in revenue in only the first four months of 2019 when, in reality, YouPlus ultimately earned less than $280,000 in revenue for all of 2019.
By September 2019, YouPlus was running short on cash and Shamim was seeking to raise money for YouPlus in a Series A financing from venture capital investors. During the same time period, Shamin, also sought bridge loans from existing investors to cover YouPlus’s costs. In connection with these efforts to raise funds, investors and potential investors requested that Shamim provide more detailed financial information about YouPlus and populate a data room with bank statements, customer contracts, and other materials that would back up the revenue Shamim claimed YouPlus was earning.
Shamim admitted that, in response to these requests and to conceal the fact that he had previously provided false information about YouPlus revenue, Shamim altered bank statements for YouPlus’s bank accounts in India and the United States. The false documents reflected revenue Shamim knew did not exist. For example, Shamim altered a statement for an account YouPlus held at a U.S. bank so that it showed totaling over $600,000 from 35 different companies, including Coca-Cola, Kraft, and Netflix. The deposits did not actually exist. The true bank statement for that month reflected only one $65,000 customer deposit. Shamim also admitted to forging or altering contracts purporting to show subscription agreements between YouPlus and purported customers.
Shamim admitted that, from August 2018 through October 2019, he used these false statements about revenue and customers to obtain about $6.4 million from investors.
On June 14, 2022, a federal grand jury handed down an indictment that charged Shamim with three counts of wire fraud, in violation of 18 U.S.C. § 1343, and one count of securities fraud, in violation of 15 U.S.C. § 78j(b) and 78ff and 17 C.F.R. § 240.10b-5. Pursuant to the plea agreement, Shamim pleaded guilty to one count of securities fraud and the court dismissed the remaining counts during the sentencing hearing.
In addition to the 30-month prison term, Judge Donato ordered Shamim to pay a $50,000 fine and to serve three years of supervised release, which will begin after he leaves prison. Shamim is currently released on bond, and Judge Donato ordered that Shamim report to begin serving his sentence on April 28, 2025. In addition, Judge Donato scheduled a hearing for June 23, 2025, to determine issues regarding restitution.
The case is being prosecuted by the Corporate and Securities Fraud Section of the U.S. Attorney’s Office for the Northern District of California. Assistant U.S. Attorneys Lloyd Farnham and Noah Stern are prosecuting the case with the assistance of Madeline Wachs, Sara Slatterly, and Claudia Hyslop. The prosecution is the result of an investigation by the FBI. The U.S. Attorney’s Office and the FBI thank the San Francisco Regional Office of the Securities and Exchange Commission (SEC). An SEC civil enforcement action is currently pending against Shamim in the Northern District of California.
Source: DOJ Release
