The initial public offering of shares of the Internet search engine Google is not scheduled to take place until the summer, but there are already some people who have made money from this IPO. Enterprising Dutchman Shamoon Rafik has extracted $500,000 from wealthy New York investors by offering to buy Google shares through him on the cheap.

Google's impending IPO was first reported late last year. The market was in a frenzy over the rumors: Not only is Google the world's most popular search engine, but its stock market debut would be the first truly major IPO by an Internet company since the stock market bubble began to deflate in 2000 and tech companies found themselves in deep crisis.

Rafiq, who worked as a business development manager at British Telecom, decided to play on investors’ interest in the event. He went to New York and began meeting with wealthy investors, introducing himself as a venture capitalist and classmate of Google founders Sergey Brin and Lawrence Page (both of whom attended Stanford University). He said that Brin and Page had reserved a block of Google preferred shares to sell to friends and relatives at $12 a share before the IPO. Rafiq was supposed to receive these shares, and he offered them to interested investors.

Specific details of the IPO were kept secret by Google executives until the moment of its announcement. On April 29, Google announced that it intended to raise $2.7 billion through the placement; the company's market capitalization as a result of the IPO is expected to be at least $20 billion, and according to some estimates, $30-40 billion. The placement price of shares will not be set by underwriters, but at an online auction: the company, together with the banks organizing the issue, Morgan Stanley and CSFB, will determine the price range in which investors will be able to submit bids. However, this range will only be a guideline - investors will be able to set prices outside it. According to analysts' calculations, the share price during the placement may be from $66 to $100.

However, when Rafik was tempting potential investors with the opportunity to make money on a popular Internet company, the details of the IPO were not disclosed. However, the Dutchman apparently had an extraordinary talent for persuasion: at least five people who are not amateurs in the world of finance transferred about $500,000 to Rafik’s bank accounts. Among them are a lawyer working for a European telecommunications company, an investment banker, a high-ranking manager of a brokerage company, and the chairman of the board of directors of a transnational telecommunications company. The investigation has not disclosed their names.

Upon receiving the money, Rafik immediately spent it on a luxurious life. For three months, he lived in five-star Four Seasons and Ritz-Carlton hotels, ate in expensive restaurants, giving waiters $100 tips, visited fashionable night clubs, played in casinos, called strippers and models to his place. In total, he spent $350,000 of "client" money.

An investment bank employee was the first to suspect something was wrong: apparently, the more information about the planned placement of Google shares appeared, the more suspicious became the terms on which Rafik proposed to invest in them. The banker began to demand his money back. In March, FBI agents arrested Rafik in New York a few hours before he was about to fly home to the Netherlands.

He pleaded guilty Monday in a deal with prosecutors and faces at least five years in prison.

Google's IPO Has Already Made Money