Indian-origin man pleads guilty to defrauding US dept out of over $29 mn

An Indian-origin owner of a local technical training school in San Diego pleaded guilty to defrauding the US Department of Veterans Affairs out of more than $29 million in eduction benefits meant for veterans.

Nimesh Shah, 36, owner of Blue Star Learning, pleaded guilty to defrauding the Department of Veterans Affairs out of more than $29 million in Post-9/11 GI Bill benefits.

The Post-9/11 GI Bill provides veterans and other eligible individuals with assistance for education-related expenses such as tuition and housing.

The Department of Veterans Affairs pays tuition and fees directly to the school where the veteran is enrolled, and if the veteran is enrolled on more than a half-time basis, it additionally provides a monthly housing allowance directly to the veteran, as well as money for books, supplies, equipment and other expenses.

As a result of Shah's fraud, the Department issued over $11 million in tuition payments to his training centre and over $18 million in housing allowances and stipends.

Shah's wife, Nidhi Shah, 34 pleaded guilty at the same time to one count of False Statement, as a result of lies she told to agents at the time of her interview.

According to Shah's plea agreement, from March 2016 to June 2019, he conspired to defraud the Department with regards to Post 9/11 GI Bill benefits.

Specifically, although Shah knew that close to 100 per cent of students at Blue Star Learning were veterans receiving educational assistance, he repeatedly misrepresented to federal agencies that his centre was in compliance rules that required a centre to have at least 15 per cent non-veterans for each course.

Shah created fake student files for non-veterans in each programme and provided fraudulent dates of birth, social security numbers, addresses, phone numbers and emails for each fraudulent non-veteran student.

Shah also submitted fraudulent spreadsheets to federal agencies claiming that all of his center's students listed were employed in the informational technology field. On these spreadsheets, Shah provided fraudulent phone numbers, email addresses, employers, and employer contact information for each student.

He additionally created 30 fictitious companies that he listed as the employers on the fraudulent spreadsheets, and hired individuals to create fraudulent email addresses and domain names for each fictitious company.

Shah directed a Blue Star Learning employee to purchase 30 cellular telephones, one for each fictitious employer, and had employees of Blue Star Learning create voicemails on each cellular telephone so that it would appear that the fraudulent businesses were legitimate if agencies called to check.

"These funds were meant to provide educational benefits to veterans who served our country, not line the pockets of unscrupulous opportunists," said US Attorney Robert Brewer.

"This defendant crafted an elaborate scheme to fleece the government and taxpayers, but this case put a stop to this significant fraud." Brewer thanked prosecutor Michelle Wasserman and federal agents for excellent work on this case.