August 16, 2019
By Caity Witucki
Contributing Editor, Fraud Friday
Fraud Friday — UPDATE: What happened to Nik Patel?
Nikesh “Nik” Patel, is currently serving a 25-year prison sentence in a Federal Corrections Institution in Williamsburg, South Carolina. According to court records, Patel organized the largest USDA loan fraud scheme in history, obtaining over $179 million from fraudulent loans. He is scheduled to be released on October 9th, 2039.
According to the Department of Justice, Patel was the Chief Executive Officer of First Farmers Financial LLC, a company which sold fabricated loans. From 2012 to 2014, Patel created false documents which he sent to investment firms to support the fake loans. He then submitted documents to a Milwaukee investment firm that gave the appearance that his company had lent money to borrowers in Florida and Georgia. All of the loans submitted to the investment firm were completely fabricated with no actual borrower, no pre-existing loan, or government guarantee.
The USDA was alerted to the scheme when Pennant Management, an asset management firm, filed suit against Patel for 26 loans – totaling $179 million. After an investigation into the suit, the USDA confirmed that 25 of Patel’s loans were not in their computer system. In October 2014, Patel was arrested on wire fraud charges.
Patel’s arrest came as a surprise to the community as he was a well-known businessman and influential political donor. Aside from Patel’s fraudulent loan business, he was also a partial owner of a restaurant in Orlando and he had recently purchased five hotels. Upon Patel’s arrest, FL Gov. Rick Scott and Florida’s Republican Party gave all of Patel’s donations to charity.
Investigation into Patel’s fraudulent business revealed that he had been using the money from his fraud scheme to fund his lavish lifestyle. He reportedly owned several luxury cars (including a Rolls Royce and a Lamborghini), wore custom jewelry, flew around the world in private jets, and frequently vacationed in Panama where he “blew off steam”.
In 2015, Patel plead guilty on all 5 counts brought against him. He then requested that the court allow him to remain free of bail so that he could help recover money for the victims of
Although the court granted Patel’s request, Patel did not make an effort to repay his victims. Instead, he obtained $19 million in fraudulent loans which he then used to purchase more luxury items and host a $30,000 birthday party for his infant daughter.
According to an Opinion written by 7th Circuit Court Judge, Charles P. Kocoras, just days before Patel was to be sentenced, he attempted to flee the United States to obtain political asylum in Ecuador.
In the months leading up to the attempted escape, Patel paid $40,000 to arrange a charter flight, obtained a fake passport, wired $3 million to Ecuador, attained $500,000 in luxury vehicles (which were waiting in Ecuador), rented a $1 million house and hired a lawyer to help him with the extradition process. At 7:00 a.m. on January 6th, 2018, FBI agents assigned to Patel observed him traveling with another person to the Kissimmee Gateway International Airport. When the FBI arrested Patel at the airport, they seized 7 luxury watches, $20,000 cash, numerous credit cards, and a “white” powder.
Patel was sentenced to 25 years in prison followed by 3 years with supervised release. In March 2019, Patel brought the case before the 7th Circuit Court of Appeals. He argued that his sentence was both procedurally and substantively unreasonable. The 7th Circuit Court affirmed the district court’s decision.
Patel was held at the Metropolitan Correctional Center in Chicago before being transferred to the Federal Corrections Institution in Williamsburg. Although it has not been confirmed, it is likely Patel has been subjected to diesel therapy, a form of punishment where inmates are shackled and then transported for days or weeks on a plane or bus with stale food and limited access to the toilet.
Read our previous reporting here