Indian-American man pleads guilty in $17 Million bank fraud

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Rajendra Kankariya, 61, of Tenafly, New Jersey, on September 15 admitted his role in orchestrating and carrying out a scheme to defraud a bank in connection with a $17 million secured line of credit, according to Department of Justice – U.S. Attorney’s Office, District of New Jersey.

Kankariya, the president of a now-defunct New Jersey-based marble and granite wholesaler pleaded guilty by videoconference before U.S. District Judge Susan D. Wigenton to allegation charging him with one count of conspiracy to commit wire fraud affecting a financial institution.

He faces a maximum penalty of 30 years in prison and a fine of $1 million. Kankariya is scheduled to be sentenced on January 18, 2021.

According to court documents, from March 2016 through March 2018, Kankariya, the president and part owner of Lotus Exim International Inc, conspired with other LEI employees to obtain from the bank a $17 million line of credit by fraudulent means.

The bank extended the line of credit believing it to have been secured in part by LEI’s accounts receivable. In reality, Kankariya and his conspirators fabricated or inflated many of the accounts receivable, ultimately leading to LEI defaulting on the line of credit, prosecutors alleged.

To conceal the lack of sufficient collateral, LEI employees, with the knowledge and approval of Kankariya, created fake email addresses on behalf of LEI’s customers so they could pose as them and answer the bank’s and outside auditor’s inquiries about the accounts receivable.

The scheme involved numerous fraudulent accounts receivable where the outstanding balances were either inflated or entirely fabricated. The scheme caused the bank losses of about $17 million, a statement issued by US Attorney Craig Carpenito said.