Indian American physician in Louisiana accused of $13.3 million fraud

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NEW YORK: An Indian American physician in Louisiana, Dr. Hiren D. Patel, has been accused of fraud by a bank, by illegally obtaining $13.3 million in loans and then trying to walk away from paying back.

MidSouth Bank of Lafayette has asked a bankruptcy court judge not to allow Patel, who owns the Arkansas Convention Center & Holiday Inn in Texarkana, to be allowed to walk away from a $13.3 million debt he owes the bank, reported Arkansas Business.

The bank said Patel “did knowingly and fraudulently … make a false oath or account” when he obtained the loans, the bank said in an August filing in U.S. Bankruptcy Court in Texas. It asked the bankruptcy court judge to deny a discharge of the debt.

Patel, and his wife, Nila, along with two of Patel’s companies, are in Chapter 11 bankruptcy in Texas.

Between May 2010 and September 2013, the bank made a series of loans to Patel’s companies to build and furnish the Country Inn & Suites in Texarkana, Texas, and the convention center and hotel project on the Arkansas side of the city. At the end of March 2016, $13.3 million was still owed on the loans, according to the bank’s filing.

The bank said that instead of using the money for the properties as required, Patel transferred at least $1.3 million to his other companies or to his father, Dineshchandra Patel, sometimes called Dinesh, who has an ownership interest in his son’s companies, the Arkansas Business reported.

The bank said that Hiren Patel was the one who contributed all the money to the companies. His father, “on the other hand, contributed virtually nothing,” MidSouth Bank said. “He guaranteed no debt. He carried none of the risk.”

MidSouth charged that Patel and his father “conspired to make substantial transfers of assets to Dinesh, or to third parties for Dinesh’s benefit.”

In addition, the bank said that in September 2015, just before Patel and his companies filed for bankruptcy reorganization in late 2015 and 2016, he transferred money from his companies so he could buy a house with his wife in Southlake, Texas. The house, with a value of $450,000, has been claimed as exempt in Patel’s bankruptcy, the filing said.

Hiren Patel also misrepresented his financial condition, according to the pleading. The financial statements he submitted to the bank showed that the convention center and Holiday Inn had a value of $16 million and the Country Inn & Suites was valued at $6.5 million, MidSouth said. The Country Inn recently sold for $2.9 million and the winning bid for the convention center and Holiday Inn was $6.6 million.

Hiren and Nila Patel’s attorney, Bill Payne of Dallas, denied the allegations of wrongdoing in his filing but didn’t return calls for comment. No court date has been set, the Arkansas Business report added.