Indian-origin hotel developer admits to defrauding investor

An Indian-origin hotel developer and former banker has pleaded guilty in a US federal court to defrauding an investor of USD 500,000 and faces up to 40 years in prison.
Rajesh C Patel, 55, pleaded guilty to two counts of wire fraud in a court in Tennessee. He was originally charged with 10 counts of wire fraud and money laundering.
Patel was a hotel owner, developer and shareholder in a Georgia bank that was involved in bidding on mortgages auctioned by the Federal Deposit Insurance Corporation (FDIC). He operated a company known as Diplomat Properties.
"Patel admitted accepting USD 500,000 from a Brentwood ... Investor in connection with an anticipated USD 3.75 million bid on a hotel mortgage," a statement from US Attorney David Rivera's office said.

"The bid submitted by Patel was not the winning bid and Patel instead used these funds to pay a debt arising from an unrelated transaction."
The Brentwood investor is identified as "MK" in public court documents, Gwinnett Daily Post reported.

Patel also made misrepresentations to the investor about the outcome of the auction and hid that he used the money for other purposes.
Patel, who has already repaid the money to the victim, is scheduled to be sentenced October 5.
He faces up to 40 years in prison following in the plea, according to Rivera.