April 26, 2019
Fraud Friday – Chicago Group Sentenced for Bank Fraud Scheme
By Dominic J Bartolone
Contributing Editor, Fraud Friday
Four defendants who pleaded guilty to bank fraud charges were sentenced in U.S. District Court to federal prison time and ordered to pay more than $14.3 million in restitution for their part in a scheme that allowed them to pocket over $40 million in loan proceeds.
The four defendants were indicted in 2013 for a scheme that defrauded a bank on loans backed by the U.S. Small Business Administration, after the bank discovered it had lost millions on the loans.
Between 2006 and 2009, Charnpal Ghuman, 39, of Palatine, Illinois, and Aga Khan, 39, of Bloomingdale, were in business together as partners in a gas station-flipping scheme. As part of the scheme, they bought gas station properties and resold the operations to buyers that they knew were not qualified to obtain bank financing for their purchase of the business.
The two conspired with a bank officer inside American Enterprise Bank to submit false application documents for the buyers of their gas station properties, making it easier for them to qualify for bank loans backed by the SBA.
An accountant also participated in the scheme by providing American Enterprise with fake tax returns to help get more than half of the loan applicants qualified for financing.
The accountant, Shital Mehta, 53, from Elk Grove Village, and AEB loan officer Akash Brahmbhatt, 44, of Spring, Texas also pleaded guilty to bank fraud charges.
According to court documents, Ghuman and Khan set up several corporate entities that purchased multiple gas stations in Illinois and other areas in the Midwest, planning to flip them for a higher price.
Ghuman and Khan made arrangements for buyers to be financed through American Enterprise Bank, with the loans guaranteed by the SBA if specific criteria were met, including the requirement that buyers contribute a certain amount of personal equity to the deal. Court records show that Ghuman and Khan then falsified those equity payments required of the borrowers.
In the government’s sentencing memorandum, Assistant U.S. Attorney Sheri H. Mecklenburg said, “Ghuman and Khan walked away with millions of dollars in loan proceeds, while the borrowers defaulted, leaving the bank’s loss in the millions of dollars. “This was not a one-time lapse in judgment. Defendants’ fraud was repeated and ongoing, over the course of years.”
Ghuman was sentenced to five years and six months in prison, and ordered to pay a $2 million personal fine, and $11,843,899 in restitution. Ghuman also received a concurrent sentence of five years and was ordered to pay $1,952,653 to the IRS after also pleading guilty to filing a false tax return.
Khan was sentenced to three years in prison, $10,843,899 in restitution, and also fined $1 million, which he owes personally.
Akash Brahmbhatt will spend three years in prison and was fined $1 million, on top of being required to pay $10,843,899 in restitution.
Mehta, who was the accountant that provided false tax returns, was sentenced to one year and one day in prison, and ordered to pay restitution in the amount of $500,000.