Indian-American owner of technical training school sentenced for $29 M fraud

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Nimesh Shah, owner of Blue Star Learning, a technical training school in San Diego, was sentenced in federal court Oct. 27, 2020, almost a year after he pleaded guilty, Nov. 13, 2019.

Shah was sentenced to 45 months in custody for carrying on a multi-year scheme that defrauded the Department of Veterans Affairs (VA) out of almost $30 million in Post-9/11 G.I. Bill benefits.

As a result of Shah’s fraud, the VA issued over $11 million in tuition payments to Blue Star Learning, and over $18 million in housing allowances and stipends. In total, as a result of Shah’s fraud, the VA lost $29,350,999.

As laid out in Shah’s plea agreement and court documents on which the press release is based, Shah carried out an elaborate deception of the VA to ensure the school continued to receive funds, providing false documents, invented fake students and created fake student files.

He provided spreadsheets with false employment information and fraudulent contact information for purported graduates of the school and their made up employers.

Shah went so far as to purchase cellular telephones so that he and his employees could field VA regulator calls to made-up employers of school graduates, and hired individuals overseas to pretend to be satisfied Blue Star Learning students in response to VA regulator emails.

According to investigators who laid it out in court records, Shah’s scheme appears to be one of the largest Post-9/11 G.I. Bill fraud cases that has been prosecuted around the country, the press release from the U.S. Attorney’s Office for the Southern District of California.

Shah was also ordered to forfeit $3,076,361.77 and to pay the VA $29,350,999 in restitution.

Shah’s wife Nidhi Shah, who was the vice president and director of education at the school, was sentenced to two years of probation as a result of lying to investigators in the course of the investigation into the school.