March 9, 2018
By Bob Coleman
Editor, Fraud Friday
Fraud Friday — Nik Patel Conned Secondary Market out of Another $20 Million in January, AFTER Jailed! — Sentenced to 25 Years
Last Tuesday, U.S. District Judge Charles Kocoras said it was the largest financial fraud case he’d overseen in nearly four decades on the bench. The judge marveled at the brazenness of a scheme that involved so many lies, phony documents and other moving parts that “most mere mortals” would never even conceive of attempting it.
“There’s a certain diabolical genius to what he did here.”
The judge also blasted Nik for his botched plot to escape to Ecuador, saying he “turned his back” on the United States by requesting political asylum there just because he didn’t want to own up to his mistakes.
“It’s a little insulting. His U.S. citizenship was the gift of his birth, yet he’s so quick to throw it away because he doesn’t want to face the piper.”
Judge Kocoras shaved off five years from the 30-year sentence the feds wanted.
But wait, as always just when you think this story can’t get more bizarre — it does for 10 million more reasons.
On January 11, 2018 Farmer Mac purchased another fraudulent $10 million USDA loan from a Nik Patel alias.
The transaction closed after FIVE days after Nik Patel was arrested in Florida trying to flee to Ecuador in a private chartered jet.
Writes the US Attorney;
Defendant’s conduct was extensive and repetitive. Defendant caused the demise of several long-standing businesses and the attendant loss of income and livelihood. There are real victims in this case. This is not a crime involving theoretical losses or just large numbers. The losses are staggering, and his crimes caused financial institutions to lose faith in and stop investing in government-backed securities such as the ones he fabricated. Defendant’s commission of additional frauds while on bond can only further damage the USDA and faith in government-backed lending.
22 Individuals and institutions are forced to rely on their investments and the financial markets. Borrowers such as the fiduciaries who were victims in this case depend on investments in no-risk and government-backed securities. Defendant preyed upon that need.
Patel made no effort to have the underlying hotel ventures succeed. He made no serious effort to monitor expenses or business progress because he believed he obtained a bottomless source of revenue to support his lifestyle. His fraud on Pennant stopped only when a Pennant employee discovered the fraud. There is no reason to believe that his fraud on Pennants’ investors would not have continued indefinitely.
While on bond and awaiting sentence in this case, defendant devised a scheme to obtain fraudulent loans totaling approximately $19 million by impersonating an employee of Banco do Brazil and taking the identity of a legitimate financial institution. He assumed a persona of “Ron Elias, Vice President” and used this persona to obtain funds for his benefit. When defendant was arrested, his luggage contained the phone with the number used by “Ron Elias” to communicate with investors.
Patel was undeterred by the fact that he was on bond. He was undeterred by the sentence that he thought this Court would impose. Following his arrest and while in custody, Patel from the jail directed KT as to how to complete a pending fraud, how and where to transfer the proceeds of the fraud, and how to access the lender’s website to continue the frauds. Patel, expecting minimal consequences for the pending fraud, discussed in recorded jail calls that he would likely end up in a camp in Florida where KT could bring a computer inside the facility and they could continue to do business during visiting hours.
Reports the Chicago Tribune:
Patel used the cash to fund ill-fated hotel projects in Illinois and Florida as well as his own lifestyle, according to prosecutors. He owned a Rolls Royce, a Lamborghini and other luxury vehicles, wore custom suits and jewelry, and jetted all over the world, including multiple trips to Panama, where he “blew off steam” and visited brothels, prosecutors said in a recent court filing.
Instead, Patel was plotting all along to escape the country with his family, according to federal prosecutors. After Patel’s arrest, FBI agents found documents — some dated before he even pleaded guilty — detailing his elaborate plan for an extravagant new life, including luxury vehicles, a million-dollar home in the suburbs of Quito, a private chef and an English-language school for his four daughters, court records show.
“Wherever this defendant goes, whatever he does, he leaves a wake of financial destruction behind him,” King said.
Before he was sentenced, Patel stood at the lectern and apologized for his behavior, saying he “would not rest” until every penny of what he took had been paid back to his victims.
Reading from loose sheets of yellow legal paper, Patel, dressed in an orange jail jumpsuit and shackled at the ankles, started to choke with emotion when he talked about being separated from his daughters.
“Greed and selfishness may have a short-term benefit, but in the long run it only hurts those closest to you.” he said.
Read our previous reporting