Brothers Rahim and Karim Sadruddin, sentenced for fraud

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Twin brothers Rahim and Karim Sadruddin, 35, were sentenced in Chattanooga, TN, May 7, 2021, to 50 months in prison by the United States District Judge for the Eastern District of Tennessee Travis McDonough. The sentencing was announced by Acting United States Attorney for the Eastern District of Tennessee Francis M. Hamilton III.

The Sadruddin brothers were born in Pakistan into a family of textile manufacturers and distributors, and became naturalized citizens in 2007, according to their attorneys quoted in

According to a press release from the U.S. Attorney’s Office for the Eastern District of Tennessee, the Sadruddins as part of the plea agreement filed with the court, agreed to plead guilty to an Information charging them with two counts of wire fraud involving a Presidentially declared major disaster and emergency in violation of Title 18, United States Code, Section 1343, and one count of conspiracy to commit money laundering in violation of Title 18, United States Code, Sections 1956(h) and 1957.

The Sadruddins were charged as part of a scheme greater than $30 million to defraud the Federal Emergency Management Agency (“FEMA”), Tennessee Valley Authority (“TVA”), and the state of Tennessee related to the procurement of tarps for hurricane victims in Puerto Rico, and the fraudulent acquisition of state and federal grant funds for the purpose of establishing a textile manufacturing plant in Pikeville.

Judge McDonough sentenced each defendant to 50 months of imprisonment, followed by five years of supervised release, and $300 in special assessments.

Moreover, as part of their guilty pleas and plea agreements with the United States, the defendants will forfeit numerous items, including houses, a vehicle, bank accounts, and other items of personal property that were obtained with proceeds of the fraud; they will also be required to pay full restitution in the amount of over $7 million to the State of Tennessee, TVA, and FEMA, the press release said.



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