3 Indian Americans Indicted in Over $35 Million Loan Scam

HI INDIA NEWS DESK

Three Indian Americans out of five people have been charged in a fraudulent scheme. The scheme involved obtaining over $35 million by providing false documentation in support of Small Business Administration (SBA) loan applications for purchasing hotels.

41-year-old Mehul Ramesh Khatiwala, 63-year-old Rajendra G Parikh, 59-year-old Rajnikant I Patel from New Jersey along with two others were charged with bank fraud, making false statements to financial institutions and money laundering. according to the US Attorney for the District of Maryland.

The indictment alleges that from 2018 until 2020 defendants conspired to obtain loan proceeds for the defendants and others to buy and sell hotels in a hotel flipping scheme by making material misrepresentations and omissions to financial institutions during the loan application process.

The indictment also alleges that the defendants engaged in roundtrip transactions, whereby they falsely represented to financial institutions that over $1.5 million on deposit in a Residential Title escrow account would be used to satisfy the Buyer’s equity injection obligations, when, the indictment alleges, the funds were temporarily withdrawn from that account prior to the loan closings and redeposited back into the same escrow account subsequent to the loan closings.

If convicted, Khatiwala faces a mandatory minimum sentence of 10 years and up to life in prison for a continuing financial crime enterprise.

All of the defendants face a maximum of 30 years in federal prison for the conspiracy to commit bank fraud and for each count of bank fraud; a maximum of 5 years in federal prison