14 persons, mostly of Indian origin, charged in alleged $53 million pandemic relief fraud

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Fourteen people who allegedly bilked the Paycheck Protection Program, a COVID-era financial program, and numerous financial institutions out of more than $53 million in loan proceeds, have been federally charged, announced U.S. Attorney for the Northern District of Texas Leigha Simonton.

This case is the largest investigated to date by the Pandemic Response Accountability Committee (PRAC) Fraud Task Force, the June 28 2023, Justice Department press release said.

The defendants were arrested Tuesday (June 27) and Wednesday (June 28) in Texas, California, and Oklahoma by special agents of the Federal Bureau of Investigation (FBI), the Treasury Department’s Special Inspector General for Pandemic Recovery (SIGPR), and the Federal Deposit Insurance Corporation, Office of Inspector General (FDIC-OIG).

An indictment is merely an allegation of criminal conduct, not evidence. All defendants are presumed innocent until proven guilty in a court of law, the Justice Department noted.

If convicted, the defendants face up to 30 years in federal prison for each count of conspiracy to commit bank fraud, bank fraud and aiding and abetting, bank fraud, and making a false statement to the FDIC, 20 years for wire fraud, and 10 years for conspiracy to commit money laundering.

Those charged in the sixteen count-indictment include:

• Mihir Patel, Chief Financial Officer of Sunshine Recycling, and owner of Mammoth Group, R.A. Industries, and L.K. Industries: conspiracy to commit bank fraud, bank fraud and aiding and abetting, and conspiracy to commit money laundering
• Kinjal Patel, Controller at Sunshine Recycling:  conspiracy to commit bank fraud, bank fraud and aiding and abetting, and conspiracy to commit money laundering
• Prateek Desai, owner of West Texas Scrap:  conspiracy to commit bank fraud and bank fraud and aiding and abetting
• Wajahat Khan, aka Ray Khan, President and owner of Gulf Coast Scrap:  conspiracy to commit bank fraud, bank fraud and aiding and abetting, and conspiracy to commit money laundering
• Imran Khan, aka Ron Khan, Operations Director and owner of 4G Metals and West Texas Equipment: conspiracy to commit bank fraud and bank fraud and aiding and abetting
• Chirag Gandhi, aka Chris Gandhi, Controller of NTC Industries, and President and owner of 5G Metals and Sunshine Recycling:  conspiracy to commit bank fraud and bank fraud and aiding and abetting
• Bhavesh Patel, aka Bobby Patel, Chief Business Development Officer for Sunshine Recycling and owner of Level Eight and: conspiracy to commit bank fraud, bank fraud and aiding and abetting, and making a false statement to the FDIC
• Dharmesh Patel, aka Danny Patel, Co-President and co-owner of Elephant Recycling:  conspiracy to commit bank fraud and bank fraud and aiding and abetting
• Mitra Bhattarai, Co-President and co-owner of Elephant Recycling: conspiracy to commit bank fraud and bank fraud and aiding and abetting
• Bhargav Bhatt, aka Brad Bhatt, NTC Industries employee: conspiracy to commit bank fraud, conspiracy to commit money laundering

Those charged in separate indictments include:

• Mrunal Desai: bank fraud and aiding and abetting
• Chintak Desai, President of Nanosoft Technologies: bank fraud and aiding and abetting
• Ambreen Khan: wire fraud
• Usha Chapain, aka Usha Sharma: bank fraud

According to a series of indictments unsealed June 28, several of the charged defendants purportedly operated a group of affiliated recycling companies, including Mammoth Metal Recycling, Elephant Recycling, Gulf Coast Scrap, 4G Metals, 4G Plastics, 5G Metals, Level Eight, Sunshine Recycling, L.K. Industries, NTC Industries, West Texas Equipment, and West Texas Scrap.

They allegedly submitted at least 29 Paycheck Protection Program (PPP) loan applications that the authorities say fraudulently inflated payroll expenses, doctoring bank statements and Internal Revenue Service tax forms to falsely reflect business income. They then allegedly routed PPP loan funds through a series of bank accounts to create a false paper trail of payroll expenses.

At least two of the defendants also allegedly submitted false applications to financial institutions on behalf of their purported recycling companies to fraudulently obtain, in the aggregate, millions of dollars in business loan proceeds.

And one defendant allegedly lied to the Federal Deposit Insurance Commission (FDIC) by stating that he did not know several of his other alleged co-conspirators.

The Paycheck Protection Program was authorized under the Coronavirus Aid, Relief, and Economic Security Act, a federal law enacted on March 29, 2020, to provide emergency financial assistance to Americans suffering economic hardship due to the COVID-19 pandemic. The PPP provided forgivable loans to small businesses to cover payroll, rent, and other certain business expenses; the program ended in May 2021.