By Uttara Choudhury
NEW YORK: The US government is likely to ask India to issue a provisional arrest warrant for a high-flying Indian-American couple who are suspected of fleeing to India after allegedly defrauding the city of New York of at least $94 million, officials said on Wednesday.
Reddy and Padma Allen owned a computer consulting firm called TechnoDyne that pulled in millions in New York City contracts since 2005. Two weeks ago, the Allens were subpoenaed to testify before a grand jury about bribes they gave to corner CityTime contracts, but instead they gave US prosecutors the slip by boarding a jet for India.
Prosecutors resorted to indicting the NRI couple in absentia on Monday but the US government is likely to reach out to India's Ministry of External Affairs to request India’s help in tracking down the absconding couple.
“It is our belief that the Allens have fled to India. The US has an extradition treaty with India, so generally in cases of this nature we would alert the country,” an official from the Manhattan US Attorney’s office, told Firstpost. “They would then issue a provisional arrest warrant based on our charges. Once they are arrested they will be produced before an Indian court. The United States will then make a formal request for their extradition.”
The Indian-American couple and nine other contractors and technology consultants are charged in connection with an elaborate scheme to defraud New York City through a CityTime project meant to modernise a public payroll system for municipal employees. They siphoned off $94 million in kickbacks and ill-gotten gains, as the still-not-completed CityTime project ballooned in cost from $63 million to $600 million.
According to the indictment, between 2003 and 2010, at least $400 million of the $600 million spent on the project had been paid to TechnoDyne. Prosecutors said two employees of SAIC, the contractor the city hired to oversee CityTime, secretly pocketed $14 million in kickbacks from Reddy and Padma Allen who owned New Jersey-based TechnoDyne, by skimming $5 off every hourly charge the company submitted.
One SAIC employee, Carl Bell, has pleaded guilty and is cooperating with prosecutors. The other, Gerard Denault, has pleaded not guilty.
"We have developed evidence that the corruption on theCityTime project was epic in duration, magnitude, and scope. It served as a vehicle for an unprecedented fraud, which appears to have metastasized over time. But as stunning as the allegations are, our resolve is even stronger,” said Preet Bharara, the US Attorney for the Southern District of New York.
“We will not rest until — one way or another — every penny of fraud is recovered and returned to the City," added Bharara, who oversees more than 200 US lawyers handling many of the country’s most important cases in terrorism, organised crime, public corruption and financial fraud.
This case involves complicated financial transactions and attempts at money laundering. "Following the money in this charged criminal scheme was like tracking a ricocheting pinball from contractor to sub-contractor to shell companies and foreign bank accounts," said Rose Gill Hearn, commissioner of the Department of Investigation, whose office tracked years of bribes and kickbacks laundered through shell companies from Eastern Europe to India.
Until this financial scandal tumbled out of the cupboard, vivacious and successful Padma Allen, 43, was a strong role model for women in the Indian-American community. She was recognised in 2010 as one of Ernst & Young's entrepreneurs of the year in New Jersey.