Five Indian-Americans have been formally charged with fraud over a scheme to fraudulently obtain more than USD 10 million in loan proceeds and could face up to 30 years in prison if found guilty.
Two of the men co-owned gas stations spread across the US states of Illinois, Iowa, Nebraska and Wisconsin and sold them to purchasers financed by bank loans obtained with false financial representations.
The 23-count indictment by a federal grand jury was unsealed yesterday in a Chicago court after the arrest of 34-year-old Charanpal Ghuman. The others who were indicted are Aga Khan, his brother Shabbir Khan, Akash Brahmbhatt and Shital Mehta.
The men could face a maximum penalty of 30 years in prison and a million dollar fine for the charges.
Ghuman and Khan co-owned the gas stations and sold them to purchasers who got bank loans guaranteed in part by the Small Business Administration.
They allegedly recruited purchasers and arranged the loans through Brahmbhatt, a bank loan officer, based on false financial representations, including fake tax returns prepared by Mehta, an accountant, the Justice Department said.
They allegedly engaged in the scheme during 2006-09. The indictment seeks forfeiture of approximately USD 10 million from Ghuman and Khan, as well as USD 198,180 in proceeds from the sale of Ghuman's luxury car, which was allegedly purchased with fraud proceeds.
Brahmbhatt, 39, from Texas and Mehta, 47, from Illinois, were each charged with one count of bank fraud and will be presented on a date to be determined in the US District Court, the Justice Department said.
Ghuman and Khan recruited purchasers who did not qualify for loans from the Small Business Administration and arranged for loans in the name of the purchaser's relative or friend who had acceptable credit.
Khan, Ghuman and Brahmbhatt knew this straw purchaser would have no role in the gas station or repayment of the loans. In addition, they provided false information and documents to be submitted to the bank, including fake information about employment, income, assets, and liabilities; false tax returns allegedly and false information about the purchasers' contributions of equity.
Ghuman and Khan allegedly gave gifts like cars to Brahmbhatt for his alleged assistance in processing the loans. The proceeds were paid to Ghuman and Khan as payment for gas stations owned by various business entities they controlled, federal prosecutors said.
