Four Indian-Americans have been indicted on charges of fraud of over USD 10 million while selling 26 gas stations spread across the US states of Illinois, Iowa, Nebraska and Wisconsin.
The 23-count indictment by a federal grand jury was unsealed yesterday at a Chicago court after the arrest of 34-year-old Charanpal Ghuman. The other three indicted are Aga Khan, Akash Brahmbhatt and Shital Mehta.
Ghuman and Khan co-owned the gas stations and sold them to purchasers financed by bank loans and 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 false tax returns prepared by Mehta, an accountant, the Justice Department said.
A fifth defendant, Khan’s brother Shabbir Khan was also charged separately with tax offences.
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 US District Court, the Justice Department said.
Between 2006 and 2009, the four allegedly engaged in the scheme involving the selling of 26 gas stations. Ghuman and Khan recruited purchasers of their gas stations who did not qualify for loans of Small Business Administration (SBA) and arranged for loans in the name of the purchaser’s relative or friend who had acceptable credit.
Ghuman, Khan and Brahmbhatt knew that this straw purchaser would have no role in the gas station or repayment of the loans. In addition, the three provided false information and documents to be submitted to the bank, including false information about employment, income, assets, and liabilities; false tax returns allegedly prepared by Mehta; 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 fraudulent loans. The loan proceeds were paid to Ghuman and Khan as payment for gas stations owned by various business entities they controlled, federal prosecutors said.