Indian national admits participating in USD 17 million bank fraud in US

A 52-year-old Indian national has admitted guilt in connection with a scheme to defraud a US bank of $17 million in a secured line of credit, announced US Attorney Philip R Sellinger.

Nitin Vats, a former employee of a now-defunct New Jersey-based marble and granite wholesaler, pleaded guilty before US District Judge Susan D Wigenton to one count of an indictment charging him with conspiracy to commit wire fraud affecting a financial institution, the Department of Justice (DoJ) said on Wednesday.

According to documents, from March 2016 through March 2018, an owner and employees of Lotus Exim International Inc (LEI), including Vats, conspired to obtain from the victim bank a USD 17 million line of credit by fraudulent means.

To mask the lack of adequate collateral, Vats generated fake email addresses for LEI’s customers, allowing other LEI employees to impersonate these customers and respond to inquiries from the victim bank and external auditors regarding the accounts receivable. The scheme encompassed numerous fraudulent accounts receivable with inflated or entirely fabricated outstanding balances, resulting in approximately $17 million in losses for the victim bank.

Federal prosecutors alleged that to conceal the lack of sufficient collateral, Vats created fake email addresses on behalf of LEI’s customers so that other LEI employees could pose as those customers and answer the victim bank’s and outside auditor’s inquiries about the accounts receivable.

The scheme involved numerous fraudulent accounts receivable where the outstanding balances were either inflated or entirely fabricated. The scheme caused the victim bank losses of approximately USD 17 million, it said.

He faces a maximum potential penalty of 30 years in prison and a fine of USD 1 million. His sentencing is scheduled for September 11.

With inputs from PTI.