Indian-American charged in USD 1.9 million fraud scheme

New York: A Indian-American former president of a construction company has been arrested and charged in a USD 1.9 million fraud scheme in which he underpaid dozens of his employees, some of whom were working illegally.

Yashvant Patel, 59, has been charged with four counts of mail fraud and four counts of making false statements in documents required to be kept under federal laws. The indictment seeks forfeiture from Patel of USD 1.9 million.

While each count of mail fraud carries a maximum sentence of 20 years in prison and a USD 250,000 fine, each count of making false statements carries a maximum sentence of five years in prison and a USD 250,000 fine.

Patel, who was arrested last week near Chicago, paid less-than-union-scale wages to dozens of employees, including illegal aliens, in order to reduce the employer contributions to benefit funds, according to the indictment.

Patel falsely reported that his company My Baps and a sister firm, Vijay Construction, owed approximately USD 600,000 less to the benefit funds and approximately USD 1.3 million less to the companies’ employees than what was required by collective-bargaining agreements with the union, the indictment added.

From January 2009 to October 2010, Patel controlled the daily operations and finances of My Baps and Vijay, both of which operated as concrete and asphalt contractors in Chicago.

He had authority over the bank accounts of both the companies and approved expenditures to outside entities, including monthly payments to the benefit funds.

The benefit funds, in turn, provided union members with pension, health and training benefits.

The indictment charges that Patel under-reported approximately 33,000 hours of work performed by his employees, some of whom were not lawfully entitled to work in the US, resulting in lower employer contributions into the union’s benefit funds.

Patel paid many of these workers in under-the-table cash payments, at wages that were less than what was required by the collective-bargaining agreements, the indictment said.