Two New Jersey Indians Rajendra Kankariya (61) and Rakesh Sethi (44) of Tenafly and Basking Ridge, NJ respectively have been arrested for allegedly orchestrating and participating in a fraud scheme against a bank in connection with a $17 million secured line of credit.
Rajendra Kankariya and Rakesh Sethi were President and the Chief Financial Officer of a now defunct New Jersey-based marble and granite wholesale company Lotus Exim International Inc.
According to the case documents and court statements:
From late 2015 to early 2016, Lotus Exim International Inc. (LEI) obtained from the victim bank a $17 million line of credit to discharge a prior debt and gain working capital. The line of credit was to be secured by LEI’s accounts receivable and assets. In reality, LEI’s accounts receivable and assets were insufficient to serve as collateral for the line.
In order to conceal the lack of sufficient collateral, LEI and its employees, including Kankariya and Sethi, devised a scheme to create fake email addresses on behalf of LEI’s customers so they could pose as those customers and answer the bank’s and outside auditor’s inquiries about the accounts receivables. 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 $17 million.
Charges & Potential Penalty
Rajendra Kankariya and Rakesh Sethi are charged by complaint with one count each of conspiracy to commit wire fraud affecting a financial institution.
If convicted, Rajendra Kankariya and Rakesh Sethi face a maximum potential penalty of 30 years in prison and a fine of $1 million or twice the gross gain or loss derived from the offense, whichever is greater.
Both Rajendra Kankariya and Rakesh Sethi made their initial court appearances today in Newark federal court and were each released on $500,000 bonds secured by property.
The case against the two New Jersey Indians Rajendra Kankariya and Rakesh Sethi was investigated by FBI special agent Mr. Anip Patel.