Indian-American pleaded guilty in $17mn bank fraud



An Indian-American man has pleaded guilty to defrauding a bank of $17 million.

The accused identified as Rajendra Kankariya 61, served as the president of a New Jersey-based marble and granite wholesaler has admitted his role in scheming to deceive a bank in connection to secure a line of credit, a US Attorney said.

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

The act carries a maximum penalty of 30 years in prison and a fine of $1 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 International Inc, conspired with other LEI employees to obtain from the bank a $17 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 cover the lack of sufficient collateral, LEI employees on the approval of Kankariya had 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 cost the bank about USD 17 million, a statement issued by US Attorney Craig Carpenito said.