 "Indian-American Essex Holdings ex-CEO gets 15 yrs in jail for $33-mn fraud")
A 44-year-old Indian-American has been sentenced to 15 years in prison for duping over 100 investors of $33 million through fraudulent schemes.
Navin Shankar Subramaniam Xavier, a resident of Florida, was the former Chief Executive Officer of Essex Holdings, the company through which he carried out two fraud schemes. He raised more than
He was sentenced yesterday to 15 years in prison by US District Judge Darrin Gayles in Miami.
The first scheme involved nearly 100 investors who purchased $30 million worth of promissory notes purportedly secured by interests in iron ore mining in Chile.
The second scheme involved unlawfully obtaining $1.2 million in economic development funds as well as valuable industrial property from the State of South Carolina.
Xavier was convicted by guilty plea in January on two counts of wire fraud. One wire fraud count related to the investment fraud scheme and the other count to the South Carolina economic development scheme.
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He used false financial statements, forged documents, and promises of fixed rates of return, to induce people to invest in the company. Most of the money was used for purposes other than what was promised, including to support lavish spending by Xavier and his wife for expensive jewelry, luxury vehicles, wedding expenses, and cosmetic surgery.
Eventually, Xavier used new investor money to pay old investors in a Ponzi-like fashion before the scheme collapsed.
Evidence filed in court showed that the actual investor losses from the scheme exceeded $29 million.
The second scheme involved Xavier using Essex Holdings to obtain $1.2 million in payments and approximately $1.5 million worth of commercial real estate from the South Carolina Coordinating Council for Economic Development (SCCCED), a division of the South Carolina state government, that was supposed to be used to develop a dilapidated industrial property into a diaper plant and rice packaging facility.
According to documents filed in the court, he provided false financial documentation to SCCCED in order to obtain the contract, and later provided fake contractor invoices and fake bank statements in order to get paid under the contract. As with the investment fraud scheme, Xavier spent a significant portion of the development money for his personal expense and wired some of it to the same overseas accounts used in the investment fraud.