Mobile advertising scheme masked $25 million revenue fraud

Federal prosecutors unveiled charges on August 7, 2025, against three advertising industry executives who allegedly exploited mobile advertising transactions to orchestrate a $25 million accounting fraud. The scheme involved Near Intelligence Inc., a location data provider serving restaurant and retail advertisers, and MobileFuse LLC, a programmatic mobile advertising platform.

According to the Southern District of New York indictment, Anil Mathews, 51, former CEO of Near Intelligence, and Rahul Agarwal, 40, former CFO, conspired with Kenneth Harlan, 52, CEO of MobileFuse, to create fictitious advertising transactions that artificially inflated Near's revenue by approximately 28 percent during critical periods leading up to its public offering.

The fraud exploited the complex nature of programmatic advertising relationships, where data providers like Near Intelligence supply location analytics to mobile advertising platforms like MobileFuse for targeting campaigns. The defendants manipulated this legitimate advertising supply chain to create fake revenue streams that misled investors about Near's actual business performance.

Near Intelligence specialized in location-based advertising intelligence, providing foot traffic data and consumer movement analytics to advertisers across restaurant, tourism, automotive, and retail sectors. The company's Allspark platform enabled marketers to compile consumer data for advertising campaigns and measure changes in consumer behavior to evaluate campaign effectiveness.

Programmatic advertising fraud mechanics

The scheme began with Near executives establishing financial ties to MobileFuse in January 2021. Mathews and Agarwal invested $2 million in MobileFuse through a Singaporean entity, obtaining approximately 1.2 million Class B shares representing 10 percent ownership. This investment created the foundation for subsequent fraudulent advertising transactions between the companies.

MobileFuse operated as a mobile advertising demand-side platform, facilitating programmatic ad purchases across mobile applications. The company connected advertisers with mobile app inventory through real-time bidding systems, representing the type of legitimate advertising technology infrastructure that the defendants exploited for their fraud.

Starting in May 2021, the companies began exchanging fraudulent invoices disguised as advertising services transactions. Near would send large payments to MobileFuse ostensibly for advertising inventory or data services. MobileFuse would then return slightly smaller amounts on the same day, creating the appearance of legitimate advertising revenue while actually representing circular money movements.

The transaction records reveal the systematic nature of the advertising fraud. On May 27, 2021, Near paid MobileFuse $1,185,569, followed by a $1,250,000 return payment from MobileFuse on May 28. Similar patterns continued throughout 2022 and 2023, with transactions ranging from $64,431 to $4.5 million, all disguised as advertising services.

Internal communications show how the defendants coordinated these fake advertising transactions. When MobileFuse executives discussed "a huge payment to NEAR for 1.25M," they explicitly outlined the circular nature: "they will wire us first... [and] we turn around and then pay them." The difference between payments represented amounts MobileFuse legitimately owed Near for actual advertising services.

Advertising industry exploitation and deception

The defendants deliberately exploited the complexity of programmatic advertising relationships to disguise their fraud. Legitimate transactions between data intelligence companies and mobile advertising platforms typically involve intricate fee structures, revenue sharing arrangements, and performance-based payments that can obscure the underlying economics.

Harlan acknowledged the fraudulent nature of the advertising revenue inflation in internal communications. When questioned about large wire transfers from Near, he explained: "Basically, they are grossing up their revenue. The net though is less than what [another account] cost[s] us. And they pay us first so no risk in funds."

By March 28, 2023, Harlan explicitly recognized the contrast between MobileFuse's legitimate advertising revenue and Near's artificially inflated figures. He texted a colleague: "Interesting note....we have more revenue than Near and obviously profitable both in 2022 and forecasted for 2023 and our revenue is real."

The fraud required sophisticated concealment within advertising industry financial reporting. Near booked the circular payments as legitimate advertising revenue, while MobileFuse "netted" the amounts against what it actually owed Near for genuine advertising services. This asymmetrical accounting treatment enabled Near to report inflated advertising revenue while MobileFuse avoided booking fictitious income.

When Near's billing department inadvertently sent a fraudulent invoice to a MobileFuse employee unaware of the scheme, Harlan immediately contacted Near executives expressing concern about exposure: "Why would this be sent to anyone but [MobileFuse Executive-3] or myself? ... Now I have to explain to a random employee on why we are spending so much with Near."

Impact on advertising technology investors

The advertising fraud directly targeted Special Purpose Acquisition Company (SPAC) investors evaluating Near Intelligence's growth potential. The inflated advertising revenue figures were specifically designed to make Near appear more attractive for acquisition by KludeIn I Acquisition Corp., enabling Near's public debut through the SPAC merger process.

Near's fraudulent advertising revenue reporting influenced critical investor presentations and regulatory filings. The company's Form S-4 Registration Statement filed June 30, 2022, stated that "[Near] generated $45 million in revenue in 2021, reflecting an increase of 350% from our revenue in 2020, which was $12.80 million. In the first quarter of 2022, [Near] generated $14 million in revenue, reflecting a growth rate of 295% over the same period in 2021."

These growth figures, artificially enhanced by the fraudulent advertising transactions, convinced SPAC investors to proceed with the merger that took Near public in March 2023. The advertising revenue fraud enabled Near to meet or exceed guidance projections that would have failed based on legitimate business performance alone.

Near's public reporting continued emphasizing advertising revenue growth after the SPAC merger. Press releases announced "Full year revenue of $59.7 million, up 42% year-over-year" for 2022 and "Q1 2023 revenue of $15.5 million, up 10% year-over-year" for the first quarter of 2023. During earnings calls, executives emphasized meeting revenue guidance ranges that relied on the fraudulent advertising transactions.

Broader advertising industry implications

The case highlights vulnerabilities in advertising technology financial reporting and due diligence processes. The defendants exploited the inherent complexity of programmatic advertising ecosystems, where data providers, demand-side platforms, and advertising exchanges interact through multiple revenue-sharing arrangements that can obscure underlying business fundamentals.

Recent cases involving advertising technology companies demonstrate ongoing challenges with revenue recognition accuracy in rapidly growing digital advertising segments. The Kubient case involved similar issues with artificial intelligence advertising fraud detection claims and revenue manipulation affecting public market investors.

Industry investigations have revealed systematic problems with advertising measurement and verification, where bot traffic and fraudulent impressions cost advertisers billions annually. These measurement challenges create environments where financial fraud can flourish alongside operational fraud affecting advertising campaign effectiveness.

The Near Intelligence case underscores the importance of transparency in advertising technology vendor relationships and revenue recognition practices. Financial mismanagement issues have affected other advertising industry players, highlighting the need for enhanced oversight and due diligence across the advertising supply chain.

For marketing professionals evaluating advertising technology vendors, this case emphasizes the importance of understanding underlying business models and revenue sources. Programmatic advertising platforms and data intelligence providers should demonstrate clear, auditable revenue streams that reflect genuine advertising services rather than circular transactions or inflated metrics.

Advertising audit manipulation revealed

The defendants systematically misled auditors conducting reviews of Near's advertising revenue and business relationships. During fiscal year audits for 2021 and 2022, as well as quarterly reviews for 2023, Mathews and Agarwal signed management representation letters containing false statements about advertising revenue recognition and related-party transactions.

These letters falsely claimed that advertising revenue was "properly recorded in the accounting records underlying the interim financial information" and that "Related-party relationships and transactions, including sales, purchases, loans, transfers, leasing arrangements, and guarantees... have been properly accounted for and adequately disclosed."

When audit firms sent confirmation requests to MobileFuse seeking verification of advertising services amounts, Harlan signed confirmations despite knowing the underlying advertising transactions were fictitious. The indictment details specific coordination between executives to ensure these false confirmations supported the fraudulent advertising revenue claims.

The audit manipulation required sophisticated understanding of advertising industry accounting practices. The defendants had to create documentation supporting their claims of legitimate advertising services while concealing the circular nature of their transactions. This included backdated agreements and fake invoices designed to appear consistent with standard advertising technology business relationships.

Law enforcement emphasis on advertising fraud

U.S. Attorney Jay Clayton highlighted the broader implications for advertising industry integrity: "Our investors, businesses and employees depend on the integrity of our capital markets. Market integrity is one of America's great competitive advantages, and this Office will hold those who undermine that essential integrity to account."

The charges reflect increased federal attention to accounting fraud within advertising technology companies. The Securities and Exchange Commission has emphasized enforcement actions targeting revenue recognition problems in digital advertising, particularly as companies face pressure to demonstrate consistent growth to attract investment and acquisition interest.

FBI Assistant Director Christopher G. Raia emphasized how executive fraud affects advertising industry credibility: "These defendants allegedly manipulated their executive positions within their respective companies to create a mirage of financial success and attract prospective buyers. The FBI is determined to apprehend any individual who relies on fraudulent misrepresentations to improve their economic portfolio."

The case emerges alongside broader regulatory scrutiny of advertising measurement accuracy and financial reporting standards. Federal agencies have increased focus on advertising technology companies following numerous cases involving inflated metrics, fraudulent traffic, and revenue recognition problems affecting both advertisers and investors.

Mathews faces additional charges including wire fraud and aggravated identity theft related to separate embezzlement schemes involving fictitious advertising services invoices. These charges carry maximum sentences of 20 years for wire fraud, five years for conspiracy, 20 years for securities fraud, and two years mandatory consecutive for aggravated identity theft.

Timeline

• 2009: MobileFuse founded as mobile advertising platform by Kenneth Harlan
• 2012: Near Intelligence founded by Anil Mathews, focusing on location data for advertisers
• 2016: Near launches Allspark advertising analytics platform for campaign measurement
• 2019: Near-MobileFuse advertising relationship begins with acquisition discussions
• January 2021: Near executives invest $2 million in MobileFuse, creating advertising partnership framework
• May 2021: Fraudulent advertising transactions begin with first round-trip payments
• 2022: Advertising revenue artificially inflated by up to 28% through continued fake transactions
• March 24, 2023: Near begins public trading following SPAC merger based on inflated advertising metrics
• October 5, 2023: Near announces advertising revenue may have been overstated
• December 2023: Near files for bankruptcy, ending fraudulent advertising revenue scheme
• September 2024: Former Kubient CEO pleads guilty to advertising fraud involving AI detection claims
• March 2025: Investigation reveals advertising fraud costing billions through bot traffic
• May 2025: Advertising agency Madwell shuts down amid financial mismanagement
• August 7, 2025: Federal prosecutors charge three advertising executives with $25 million fraud scheme

PPC Land explains

Round-tripping: A fraudulent accounting practice where money is sent from one company to another and then returned in a circular pattern to artificially inflate revenue. In this case, Near Intelligence would send large payments to MobileFuse, which would then return slightly smaller amounts on the same day, creating the appearance of legitimate advertising revenue while the transactions lacked economic substance.

Programmatic advertising: Automated buying and selling of digital advertising inventory through real-time bidding systems. MobileFuse operated as a demand-side platform in this ecosystem, connecting advertisers with mobile app inventory. The defendants exploited the complexity of programmatic advertising relationships to disguise their fraudulent transactions as legitimate advertising services.

SPAC (Special Purpose Acquisition Company): A shell company created specifically to raise capital through an initial public offering for the purpose of acquiring an existing company. Near Intelligence went public through a merger with KludeIn I Acquisition Corp., using the artificially inflated advertising revenue figures to make the company appear more attractive to SPAC investors.

Revenue recognition: The accounting principle that determines when and how revenue should be recorded in financial statements. The defendants violated proper revenue recognition standards by booking circular payments as legitimate advertising revenue, when these transactions did not represent genuine business activity or economic value creation.

Location data intelligence: Information derived from tracking consumer movement patterns and foot traffic, used by advertisers to target campaigns and measure effectiveness. Near Intelligence specialized in providing this type of data to restaurant, retail, automotive, and tourism advertisers through its Allspark platform.

Mobile advertising: Digital advertising specifically designed for and delivered through mobile devices and applications. This sector involves complex relationships between data providers, advertising platforms, and app publishers, creating the environment that the defendants exploited for their fraudulent scheme.

Securities fraud: A federal crime involving deception in connection with the purchase or sale of securities, including making false statements in financial reports or to investors. All three defendants face securities fraud charges for misleading public market investors about Near Intelligence's actual financial performance.

Wire fraud: A federal crime involving the use of electronic communications to carry out fraudulent schemes. Mathews faces additional wire fraud charges related to his separate embezzlement scheme involving fictitious invoices for luxury home rental payments in California.

Audit manipulation: The practice of providing false information or documentation to independent auditors to conceal fraudulent activities. The defendants systematically misled Near Intelligence's auditors by signing false management representation letters and providing fabricated documentation to support their inflated advertising revenue claims.

Financial reporting: The process of producing statements that disclose an organization's financial status to management, investors, and government agencies. The defendants corrupted Near Intelligence's financial reporting by incorporating fraudulent advertising revenue into quarterly and annual reports filed with the Securities and Exchange Commission.

Summary

Who: Three advertising industry executives - Anil Mathews (former CEO of Near Intelligence), Rahul Agarwal (former CFO of Near Intelligence), and Kenneth Harlan (CEO of MobileFuse LLC) - are charged with exploiting programmatic advertising relationships for financial fraud.

What: A $25 million accounting fraud scheme disguised as legitimate mobile advertising transactions between a location data intelligence company and a programmatic advertising platform, designed to artificially inflate advertising revenue by up to 28 percent through circular payment arrangements.

When: The advertising fraud operated from May 2021 through December 2023, with peak revenue inflation occurring in 2022 before Near's public offering. Federal charges were unsealed August 7, 2025.

Where: The fraud exploited advertising technology infrastructure spanning California (Near Intelligence headquarters), New York (MobileFuse operations), and international financial transfers through Singapore, affecting public market investors and advertising industry stakeholders.

Why: The executives allegedly manipulated programmatic advertising transactions to make Near Intelligence appear more attractive for SPAC acquisition, enabling a public offering while misleading investors about the company's actual advertising revenue performance and business fundamentals in the competitive location data market.