Several Indian Americans and Indian nationals were found guilty or indicted for a spate of white collar crimes –from fraudulently obtaining lines of credit to elaborate investment fraud schemes.
On Dec. 17, Indira Mohabir, 42, of La Palma in Orange County, California, who used her position at a Hawthorne-based credit union to secretly open more than 25 fraudulent lines of credit for her online boyfriend, extending more than $2.7 million in credit to him, was found guilty of 15 federal charges, including fraud and conspiracy after a three-day jury trial.
The jury found her guilty on all 15 counts in a grand jury indictment, which charged her with one count of conspiracy to commit insider fraud and financial institution fraud, eight counts of insider fraud on a federally-insured financial institution and six counts of financial institution fraud.
Mohabir is scheduled to be sentenced by United States District Judge André Birotte Jr. on April 5, according to a FBI media release, and faces a statutory maximum penalty of five years in federal prison on the conspiracy count and a maximum of 30 years in prison for each of the fraud charges.
Criminal charges are still pending against Phillip Cook, 51, who currently resides in Las Vegas, and who was able to withdraw approximately $1 million of the illicitly obtained funds before the scheme was discovered.
Mohabir, who worked as a business loan processor at Western Federal Credit Union, now doing business as Unify Financial Credit Union, according to the FBI, began a romantic online relationship with Cook in approximately November 2014, according to text messages and emails that were introduced at trial.
Although the two did not meet in person during the relevant time period, they quickly began daily correspondence by text, email and phone, exchanging messages and talking multiple times a day, the FBI said in its affidavit.
“Their romantic discussions were interwoven with discussions of how to open credit lines at the credit union, and Mohabir agreed to use her position to help Cook open these credit lines,” it said, and noted, “According to testimony from Mohabir’s supervisors and a fraud investigator at the credit union, which was corroborated by bank records, Mohabir opened lines of credit outside of her authority and without the necessary approvals from the credit union, and she overrode and bypassed the credit union’s internal controls to get the credit lines opened.”
In exchange for Mohabir’s agreement to open the lines of credit and her assistance in keeping the credit lines hidden, Cook had promised to take Mohabir on exotic trips, and he sent her flowers and money, including a $50,000 check drawn on the credit lines that she opened for him – a check that was intercepted at the credit union, according to evidence introduced at trial and court documents.
The scheme had started in late November 2014 and lasted about two months, but most of the credit lines were established – or were doubled – over a few days in January 2015.
This case is the result of an ongoing investigation being conducted by the FBI and the Federal Deposit Insurance Corporation, Office of Inspector General with theassistance of the Hawthorne Police Department. provided substantial assistance.
On Dec. 13, the former CEO, CFO and two directors of a publicly traded healthcare services company, three of whom were Indian American and Indian nationals, were indicted for allegedly orchestrating a widespread scheme to defraud investors and others out of hundreds of millions of dollars in connection with a merger transaction designed to convert the company into a private entity, U.S. Attorney for the District of New Jersey Craig Carpenito and Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division announced.
Parmjit Parmar, aka “Paul Parmar,” 48; Sotirios Zaharis, aka “Sam Zaharis,” 51; Ravi Chivukula, 44; all of New Jersey and New York, and Pavandeep Bakhshi, 41, of the United Kingdom, were charged in a three-count indictment with conspiracy to commit securities fraud, securities fraud, and wire fraud. Parmar, Zaharis, and Chivukula were first charged by complaint in May 2018. Bakhshi was charged with the same offenses in a separate criminal complaint in September 2018, which was unsealed earlier in December following his arrest at JFK Airport after he arrived from London. Zaharis and Chivukula remain fugitives.
According to documents filed in this case and statements made before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court, from May 2015 through September 2017, Bakhshi and alleged conspirators Parmar, Zaharis, and Chivukula had orchestrated an elaborate scheme to defraud a private investment firm and others out of hundreds of millions of dollars in connection with the funding of a transaction to take private a healthcare services company (Company A) traded publicly on the London Stock Exchange’s Alternative Investment Market. To fund the transaction, the private investment firm put up $82 million and a consortium of financial institutions put up another $130 million. The scheme utilized fraudulent methods to grossly inflate the value of Company A and trick others into believing that Company A was worth substantially more than its actual value.
To present a positive picture of the company’s financial wealth, the FBI said in a media release, that the conspirators allegedly sought to raise tens of millions of dollars in the public markets, purportedly to fund Company A’s acquisitions of various operating subsidiaries. In reality, a number of those entities either did not exist or had only a fraction of the operating income attributed to them.
The conspirators, according to the FBI, allegedly funneled the proceeds of these secondary offerings through bank accounts they controlled and used the money for a variety of purposes that had nothing to do with acquiring the purported targets. The money from one of the offerings was instead used to make it appear as if the operating subsidiary had substantial customer revenue when, in fact, the funds were simply transfers of the money that had been raised in the secondary offering.
The conspirators went to great lengths to make it appear that these funds were revenue, concocting phony customers and altering bank statements to make it appear as if the funds were coming from customers, law enforcement said.
The conspirators, according to the investigation conducted by the FBI, and the U.S. Securities and Exchange Commission’s New York Regional Office, allegedly:
• Created fictitious operating companies that Company A purportedly acquired in sham acquisitions.
• Falsified and fabricated bank records of subsidiary entities in order to generate a phony picture of Company A’s revenue streams.
• Generated fake income streams and phony customers of Company A and its subsidiaries.
• Made material misrepresentations and omissions to the private investment firm and others.
The defendants’ alleged actions caused the private investment firm and others to value Company A at more than $300 million for purposes of financing the transaction to take the company private.
The alleged scheme had been uncovered in September 2017, when the conspirators resigned from their positions with Company A or were terminated. On March 16, 2018, Company A and numerous of its affiliated entities filed for bankruptcy, attributing the company’s financial demise, in large part, to the fraud scheme.
The conspiracy count with which the defendant is charged carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. The securities fraud count carries a maximum potential penalty of twenty years in prison and a $5,000,000 fine.
The United States filed a criminal complaint against Parmar, Zaharis and Chivukula on May 16, 2018 for their roles in the scheme. Zaharis and Chivukula currently are fugitives. The United States also filed a separate civil complaint on the same date seeking forfeiture of four properties that Parmar owns or controls, including a house in Colt’s Neck and three apartments in New York City.
Separately, the U.S. Securities and Exchange Commission filed a civil complaint on May 16th against Parmar, Zaharis and Chivukula.