Indian national pleads guilty to role in USD 17 million bank fraud in America

A 52-year-old Indian national, named Nitin Vats, pleaded guilty to participating in a scheme to defraud a US bank in connection with a USD 17 million secured line of credit, said US Attorney Philip R Sellinger.

Dollar bill stacks and gun
Accused Nitin Vats created fake e-mail IDs that helped his company cheat due diligence and fraudulently obtain a loan of USD 17 million. Representative photo courtesy: Pixabay/QuinceCreative

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 yesterday.

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.

The victim bank extended Lotus Exim the line of credit, believing it to have been secured in part by the company’s accounts receivable. In reality, the conspirators had fabricated and inflated many of the accounts receivable, ultimately leading to Lotus Exim defaulting on the line of credit, according to a DoJ press release.

Federal prosecutors alleged that to conceal the lack of sufficient collateral, Vats created fake e-mail addresses on behalf of Lotus Exim 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.

For his role in the fraud, Vats faces a maximum potential penalty of 30 years in prison and a fine of USD 1 million. His sentencing is scheduled for September 11.

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.