Former Jersey City resident and fugitive Rajendra Patel (62) pleaded guilty today to defrauding five freight brokers out of $2.6 million in an elaborate shipping scam.
(Photo Courtesy – New Jersey Attorney General’s Office)
Rajendra Patel fled USA and evaded authorities for eight years after he and his co-conspirators were indicted in 2011 for orchestrating an elaborate shipping scam.
Rajendra Patel along with his two co-conspirators Kulwinder Dhaliwal Singh of Monroe, and Fazal Din of Dayton built up a line of credit with the brokers and then used that credit to defraud the brokers.
While Rajendra Patel returned this month and surrendered to New Jersey Division of Criminal Justice, his co-conspirators Kulwinder Dhaliwal Singh and Fazal Din remain at large.
According to a statement by New Jersey Attorney General’s Office:
Freight brokerage companies are paid a fee for serving as “middle men” between companies that need freight moved and carriers that agree to move the freight. They arrange for shipment of goods, collect payment from the company shipping the goods, and pay the carrier that moves the goods. Such brokers will extend credit to companies that regularly ship goods through them. Patel ran a scam, similar to what is known as a “bust out,” in which he built up a line of credit with the brokers and then used that credit to defraud the brokers. It is alleged that two co-conspirators who remain fugitives assisted Patel.
What was unusual about this scheme was that the defendants engaged in transactions in which one of their companies – Prime Time Freight or Diamond Freight Solutions – contracted with the freight broker to ship goods from California to New Jersey, and another one of their companies – PRP Enterprises – responded to the internet job notice posted by the broker and was hired as the freight carrier that moved the goods. The brokers were unaware of the connection between the companies. Because of the line of credit, the broker would pay PRP before the broker was paid by Prime Time or Diamond Freight.
Patel and his alleged co-conspirators initially gained the confidence of the brokers and built up a line of credit by moving some actual freight using independent drivers and major freight carriers. But PRP eventually stopped moving actual freight, while continuing to submit and be paid for fictitious invoices with falsified supporting documentation. Prime Time and Diamond Freight contracted with the brokers for a total of 1,217 shipments. The defendants allegedly laundered the illicit proceeds through a complex scheme involving moving money between the companies and making payments to relatives and other individuals to whom they had ties.
Part of the money paid to PRP by the five freight brokers was transferred through a series of transactions to Prime Time and Diamond Freight and ultimately used by those companies to, in essence, pay the brokers with their own money. However, ultimately, Prime Time and Diamond Freight failed to pay $2,630,883 that they owed to the five freight brokers. The brokers paid approximately $3.9 million to PRP. They received only about $2.1 million in payments from Prime Time and Diamond Freight out of the total of about $4.7 million which the two companies owed under their contracts.
Patel’s Plea Agreement & Penalty
Rajendra Patel pleaded guilty today to second-degree theft by deception in Hudson County Superior Court.
Under the plea agreement:
- New Jersey state will recommend that Ranjedra Patel be sentenced to seven years in state prison.
- And, Rajendra Patel must agree to pay full restitution to the victims.
Sentencing of Rajendra Patel in $2.6 million shipping scam is scheduled for September 13, 2019.