Nikesh Patel Arrested $179M Loan Fraud Case May Plead Guilty



Businessman Nikesh Patel, who had previously pleaded not guilty after being arrested in September 2014 in a $179 million loan fraud case, has indicated that he might enter a guilty plea during his plea hearing before a judge in Chicago Dec. 6.

The Orlando Sentinel reported Nov. 2 that Patel has been cooperating with authorities.

Patel is accused of selling about 26 fake loans to a Milwaukee financial firm, Pennant Management. The indictment accused Patel of claiming that his loans were guaranteed by the U.S. Department of Agriculture. Investigators have recovered about $100 million by selling off Patel’s hotels, cars and other property.

But the scope and damage of his alleged crimes widened over time too, the paper said, noting that Orlando restaurant Mingo’s, which Patel invested in, closed almost immediately.
Pennant Management has since closed its doors. Others who invested with Pennant have claimed losses directly tied to the Patel allegations. The USDA has denied responsibility for the fake loans.

Patel is accused of using Pennant’s money to buy five hotels and personal luxury items. The hotels were auctioned off to raise $80 million.

The report quoted Patrick Cavanaugh, the court-appointed receiver, as noting in documents filed with the court that recovery of the Patel money was made possible because Patel decided to cooperate.