Indian national pleads guilty to participating in USD 17 million bank fraud in US

Indian national pleads guilty to participating in USD 17 million bank fraud in US
Washington: A 52-year-old Indian national has pleaded guilty to participating in a scheme to defraud a US bank in connection with a USD 17 million secured line of credit, US Attorney Philip R Sellinger has announced.

Nitin Vats, a former employee of a now-defunct New Jersey-based marble and granite wholesaler, pleaded guilty before US District Judge Susan D Wigenton to one count of an indictment charging him with conspiracy to commit wire fraud affecting a financial institution, the Department of Justice (DoJ) said on Wednesday.

According to documents, from March 2016 through March 2018, an owner and employees of Lotus Exim International Inc (LEI), including Vats, conspired to obtain from the victim bank a USD 17 million line of credit by fraudulent means.

The victim’s bank extended LEI the line of credit, believing it to have been secured in part by LEI’s accounts receivable. In reality, the conspirators had fabricated and inflated many of the accounts receivable, ultimately leading to LEI defaulting on the line of credit, according to a DoJ press release.

Federal prosecutors alleged that to conceal the lack of sufficient collateral, Vats created fake email addresses on behalf of LEI’s customers so that other LEI employees could pose as those customers and answer the victim bank’s and outside auditor’s inquiries about the accounts receivable.

The scheme involved numerous fraudulent accounts receivable where the outstanding balances were either inflated or entirely fabricated. The scheme caused the victim bank losses of approximately USD 17 million, it said. He faces a maximum potential penalty of 30 years in prison and a fine of USD 1 million. His sentencing is scheduled for September 11.