You are here: Home » International » News » Others
Business Standard

Indian-American bank president pleads guilty in $17-million fraud

An Indian-American president of a now-defunct New Jersey-based marble and granite wholesaler has admitted his role in scheming to defraud a bank in connection with a $17 million secured line of credit

Topics
Banking system | frauds | USA

Press Trust of India  |  Washington 

corporate governance, MCA, company, audit firms, fraud, scam, audit
Illustration: Binay Sinha

An Indian-American president of a now-defunct New Jersey-based marble and granite wholesaler has admitted his role in scheming to defraud a bank in connection with a USD17 million secured line of credit, a US Attorney has said.

Rajendra Kankariya, 61, pleaded guilty by video conference before US District Judge Susan D. Wigenton to committing wire fraud affecting a financial institution.

He faces a maximum penalty of 30 years in prison and a fine of USD1 million.

Kankariya is scheduled to be sentenced on January 18.

According to court documents, from March 2016 through March 2018, Kankariya, the president and part owner of Lotus Exim Inc, conspired with other LEI employees to obtain from the bank a USD17 million line of credit by fraudulent means.

The bank extended the line of credit believing it to have been secured in part by LEI's accounts receivable. In reality, Kankariya and his conspirators fabricated or inflated many of the accounts receivable, ultimately leading to LEI defaulting on the line of credit, prosecutors alleged.

To conceal the lack of sufficient collateral, LEI employees, with the knowledge and approval of Kankariya, created fake email addresses on behalf of LEI's customers so they could pose as them and answer the 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 bank losses of about USD17 million, a statement issued by US Attorney Craig Carpenito said.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Wed, September 16 2020. 08:50 IST
RECOMMENDED FOR YOU
.