In Texas, United States, fourteen people have been charged in a $53 million fraud scheme involving a COVID-19 pandemic relief program. The accused persons are mostly business owners of Indian origin.
In a press release issued on June 28, Leigha Simonton, the US Attorney for the Northern District of Texas said that this case is the largest to be investigated by the Pandemic Response Accountability Committee (PRAC) Fraud Task Force to date.
On June 27 and 28, special agents from the Federal Bureau of Investigation (FBI), the Treasury Department’s Special Inspector General for Pandemic Recovery (SIGPR), and the Federal Deposit Insurance Corporation’s Office of Inspector General (FDIC-OIG) arrested the accused persons in Texas, California, and Oklahoma.
“Defrauding the government is an affront to American taxpayers. Defrauding the government during a pandemic, when millions of hardworking entrepreneurs were struggling to make payroll and rent,” US Attorney Leigha Simonton said.
Many of the charged accused allegedly operated an assortment of affiliated recycling companies, including Mammoth Metal Recycling, Elephant Recycling, Gulf Coast Scrap, 4G Metals, 4G Plastics, 5G Metals, Level Eight, Sunshine Recycling, L.K. Industries, NTC Industries, West Texas Equipment, and West Texas Scrap, according to a series of indictments unsealed on June 28.
They are accused of submitting at least 29 Paycheck Protection Program (PPP) loan applications that fraudulently inflated payroll expenses by altering bank statements and Internal Revenue Service tax forms to falsely reflect business income. Subsequently, the accused routed PPP loan funds through a series of bank accounts to generate fake documents of payroll expenses.
The press release stated that about two of the defendants are also accused of submitting false applications to financial institutions on behalf of their alleged recycling companies in order to fraudulently obtain millions of dollars in business loan proceeds. One of the defendants, Bhavesh Patel alias Bobby Patel allegedly lied to the FDIC by claiming that he did not know several of his other alleged accomplices.
According to the said press release, Mihir Patel, Chief Financial Officer of Sunshine Recycling and owner of Mammoth Group, R.A. Industries, and L.K. Industries, is among those charged in the sixteen-count indictment with conspiracy to commit bank fraud, bank fraud, and aiding and abetting, and conspiracy to commit money laundering.
Kinjal Patel, Controller at Sunshine Recycling, was charged with conspiracy to commit bank fraud, conspiracy to commit bank fraud with aiding and abetting and conspiracy to commit money laundering.
Prateek Desai, owner of West Texas Scrap, has been charged with conspiracy to commit bank fraud, bank fraud, and aiding and abetting.
Wajahat Khan, aka Ray Khan, President and Owner of Gulf Coast Scrap, has been charged with conspiracy to commit bank fraud, conspiracy to commit bank fraud with aiding and abetting and conspiracy to commit money laundering.
Imran Khan, alias Ron Khan, Operations Director and owner of 4G Metals and West Texas Equipment, was charged with conspiracy to commit bank fraud, bank fraud, and aiding and abetting.
Chirag Gandhi, aka Chris Gandhi, Controller of NTC Industries and President and Owner of 5G Metals and Sunshine Recycling, has been charged with conspiracy to commit bank fraud, bank fraud, and aiding and abetting.
Bhavesh Patel, alias Bobby Patel, Sunshine Recycling’s Chief Business Development Officer and owner of Level Eight, was charged with conspiracy to commit bank fraud, bank fraud and aiding and abetting and making a false statement to the Federal Deposit Insurance Corporation (FDIC).
Elephant Recycling Co-President and Co-Owner Dharmesh Patel, alias Danny Patel, has been charged with conspiring to commit bank fraud, bank fraud, and aiding and abetting. Mitra Bhattarai, co-president and co-owner of Elephant Recycling has been charged with conspiring to commit bank fraud, bank fraud, and aiding and abetting. NTC Industries employee Bhargav Bhatt, aka Brad Bhatt, is charged with conspiracy to commit bank fraud and conspiracy to commit money laundering.
Mrunal Desai, bank fraud and aiding and abetting; Chintak Desai, President of Nanosoft Technologies, bank fraud and aiding and abetting; Ambreen Khan, wire fraud; and Usha Chapain, aka Usha Sharma, bank fraud, are among those charged in separate indictments.
If found guilty, those charged may have to spend 30 years in federal prison for each count of conspiracy to commit bank fraud, bank fraud and aiding and abetting bank fraud and making a false statement to the FDIC, wire fraud, and money laundering conspiracy.
Paycheck Protection Program
The Paycheck Protection Program, established by the CARES Act, is administered by the Small Business Administration with assistance from the Treasury Department. This programme provides funds to small businesses to cover up to 8 weeks of payroll costs, including benefits. Funds can also be used to pay mortgage, rent, and utility interest.
