Indian National Admits Guilt In $17 Mn US Bank Fraud Scheme

Nitin Vats, a 52 years old Indian national, has pleaded guilty to participating in a scheme aimed at defrauding a US bank of USD 17 million (approximately Rs 141 crores). The announcement was made by US Attorney Philip R Sellinger, who revealed that Vats, a former employee of a marble and granite wholesaler based in New Jersey, admitted to one count of conspiracy to commit wire fraud affecting a financial institution before US District Judge Susan D Wigenton.

According to the Department of Justice (DoJ), Vats, along with other individuals associated with Lotus Exim International Inc (LEI), conspired to fraudulently obtain a USD 17 million line of credit from a victim bank. This scheme unfolded between March 2016 and March 2018. The victim bank extended the line of credit to LEI under the belief that it was secured by LEI's accounts receivable. However, it was later revealed that the conspirators had fabricated and inflated many of these accounts receivable.

To conceal the lack of sufficient collateral, Vats created fake email addresses for LEI's customers. This allowed other LEI employees to impersonate customers and respond to inquiries about the accounts receivable. The fraudulent scheme involved numerous accounts receivable with inflated or entirely fabricated balances, ultimately resulting in significant losses for the victim bank.

Federal prosecutors highlighted that the fraudulent activities led to losses of approximately USD 17 million for the victim bank. As a consequence of his involvement in the scheme, Vats faces a maximum potential penalty of 30 years in prison and a fine of USD 1 million (about Rs 8 crores). His sentencing is scheduled for 11 September.