Indian American motel owner charged with lying to the Labor Department

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Mehul Chandubhai Patel, 31, also known as Mike, is a motel owner in Battle Creek, Michigan and according to Assistant U.S. Attorney Timothy Verhey, he is being ordered to pay $150,500 in restitution to between 15 and 20 former employees as the last portion of his sentence for lying to Labor Department investigators during a probe of his alleged violation of minimum wage laws.

The order for the restitution was delayed by U.S. District Judge Paul Maloney until August to determine if Patel and the government could reach an agreement on the amount which was reached on Friday and announced Monday by Acting U.S. Attorney Andrew Birge, calling for an immediate payment by Patel and no further action by the government to seek back wages from Patel either in criminal or civil court.

According to a Battle Creek Enquirer report, Patel was arrested on Nov. 5, 2015, following a raid at the Rodeway Inn that he owned, by officers of the Battle Creek Police Department, the Department of Homeland Security, Office of the Inspector General and the Michigan Department of Corrections and also executed search warrants at the Super 8 Motel in Coldwater which he also owned as well as at the banks where Patel had accounts.

He was then charged with fraud along with operating a prostitution house after police suspected that sex workers were using his motel for their business and he was taking money from them in return.

Although the prostitution charges in state court were dropped Patel was still charged in federal court with violation of minimum wage laws and he pled guilty on Feb. 2, in U.S. District Court to violating a federal statute that prohibits anyone from concealing a material fact from the federal government when obligated to disclose it.

Birge said Patel admitted that, in 2005, the Department of Labor found that he had underpayed his employees and violated the minimum wage laws.

He then signed an agreement promising to repay hotel employees.

He also sent the government copies of checks which showed that he had paid back the wages, but the government said their investigation showed he required the employees to return the money to him after they cashed the checks.

Patel was sentenced to two months in jail and fined $10,000 but the determination of restitution to employees, which had been estimated at $250,000 before the delay.

“Putting Patel in jail for cheating his financially distressed employees was important, but so is making sure they are paid what they are owed,” Birge said in a statement.

“This settlement allows them to be repaid right away, rather than waiting months or years,” he added.