In one of the federal government’s widest-ranging COVID-era fraud cases to date, 14 people in Texas, Oklahoma and California have been accused of cheating the Paycheck Protection Program and a dozen financial institutions out of more than $53 million.
According to a series of indictments filed under seal June 21, 12 of the defendants controlled, were employed by or did business with “a loosely affiliated group of purported metal recycling companies” in the greater Dallas and Houston areas. The other two defendants were associated with “a purported technology company” in California.
Collectively, the indictments said, they submitted dozens of PPP loan applications that fraudulently inflated payroll expenses. Bank statements and Internal Revenue Service tax forms were doctored to misstate business incomes, the indictments said. Then, when the loans were granted, the indictments said, the proceeds were routed through a series of bank accounts to create a paper trail of phony payroll expenses.
“Defrauding the government is an affront to American taxpayers,” said Leigha Simonton, U.S. attorney for the Northern District of Texas. “Defrauding the government during a pandemic – at a time when millions of hardworking entrepreneurs struggled to make payroll and rent – is pouring salt in a wound.”
Simonton said the defendants “allegedly conspired to steal tens of millions of dollars from the Paycheck Protection Program — funds which could have helped legitimate businesses pay their bills and keep their employees afloat.”
The defendants were arrested June 27 or June 28, the day the indictments were unsealed. The case has been assigned to U.S. District Judge Ed Kinkeade in Dallas.
According to court records, the lead prosecutor is Fabio Leonardi, an assistant U.S. attorney and the coronavirus fraud coordinator in the criminal division of the U.S. attorney’s office in Dallas.
Those named in the indictments are:
- Mihir Patel, identified as the chief financial officer of Sunshine Recycling and the owner of ARA Global Industries Inc., R.A. Industries Inc., L.K. Industries Inc. and a group of purported recycling companies whose names generally included the word “Mammoth.” According to court records, Mihir Patel is represented by John M. Helms Jr. of Dallas.
- Kinjal Patel, identified as Sunshine Recycling’s controller. According to court records, Kinjal Patel is represented by Arnold Augur Spencer of Dallas.
- Wajahat Khan, also known as Ray Khan, identified as the president and owner of Gulf Coast Scrap Inc. As of Monday afternoon, electronic court records listed no attorney for him.
- Prateek Desai, identified as the owner of West Texas Scrap Inc. According to court records, Prateek Desai is represented by Taly Haffar of Dallas.
- Imran Khan, also known as Ron Khan, identified as the owner of 4G Metals Inc. and West Texas Equipment Co. Inc. According to court records, he is represented by Stephen James Green of Dallas.
- Chirag Gandhi, also known as Chris Gandhi, identified as the controller of NTC Industries Inc. and president and owner of Sunshine Recycling and 5G Metals Inc. According to court records, Gandhi is represented by Kevin B. Ross of Dallas.
- Bhavesh Patel, also known as Bobby Patel, identified as the owner of Level Eight Inc. and Sunshine Recycling’s chief business development officer. According to court records. Bhavesh Patel is represented by Lauren Anita Woods of Dallas.
- Dharmesh Patel, also known as Danny Patel, identified as the co-owner of Elephant Recycling Inc. According to court records, Dharmesh Patel is represented by Stephanie Inman of Prosper.
- Mitra Bhattarai, identified as the co-owner, with Dharmesh Patel, of Elephant Recycling. According to court records, Bhattarai is represented by Gary A. Udashen of Dallas.
- Bhargav Bhatt, also known as Brad Bhatt, identified as an employee of NTC Industries. According to court records, Bhatt is represented by Cody Lee Cofer and James Luster of Fort Worth.
- Mrunal Desai, identified as the president of Nanosoft Technologies of California. According to court records, Mrunal Desai is represented by Erik G. Babcock of Oakland, California.
- Chintak Desai, identified as a business associate of Mrunal Desai. According to court records, Chintak Desai is represented by Scott H. Palmer of Addison.
- Ambreen Khan, identified as “an individual purportedly operating as a business” who claimed 2019 business income from L.K. Industries. According to court records, Ambreen Khan is represented by Corwyn Davis and Gregg Gallian of Dallas.
- Usha Chapain, also known as Usha Sharma, identified only as “an individual purportedly operating a business as an independent contractor.” According to court records, Chapain is represented by Erin Elizabeth Hendricks of Dallas.
Mihir Patel, Kinjal Patel and Wajahat Khan were charged with conspiracy to commit bank fraud, bank fraud, aiding and abetting bank fraud and conspiracy to launder money.
Prateek Desai, Imran Khan, Chirag Gandhi, Dharmesh Patel and Mitra Bhattarai were charged with conspiracy to commit bank fraud, bank fraud and aiding and abetting bank fraud.
Bhavesh Patel was charged with conspiracy to commit bank fraud, bank fraud, aiding and abetting bank fraud and making a false statement to the Federal Deposit Insurance Corp.
Bhargav Bhatt was charged with conspiracy to commit bank fraud and conspiracy to launder money.
Mrunal Desai and Chintak Desai were charged with bank fraud and aiding and abetting bank fraud.
Ambreen Khan was charged with wire fraud, and Usha Chapain was charged with bank fraud.
The Paycheck Protection Program was authorized under the Coronavirus Aid, Relief, and Economic Security (CARES) Act of March 2020 to help alleviate economic hardships experienced by small businesses as a result the pandemic. The program provided forgivable loans to cover payroll, rent and other business expenses. It expired in May 2021.