U.S. District Judge Paul W. Grimm sentenced Rakesh Kaushal, 66, of Rockville, Maryland, to three years in federal prison Jan. 14, 2020, for the federal charge of conspiracy to commit wire fraud, in connection with a scheme to defraud his employer of more than $1.7 million. The judge also ordered him to be under three years of supervised release after he served his prison sentence. The Indian-American will also have to pay restitution with the exact amount to be determined at a later hearing, the press release from the U.S. Attorney for the District of Maryland, said.
According to his plea agreement, between August 2015 and approximately January 2017, Kaushal was employed by a company headquartered in Beltsville, Maryland (Victim Company 1), which provided construction and design services, primarily to federal government agencies. Ivan Victor Thrane was the owner and president of three construction companies operating in Dickerson and Beltsville, Maryland (“the Thrane companies”). Kaushal recommended the Thrane companies to be subcontractors on Victim Company 1 projects for which Kaushal was the Project Manager or Project Executive.
Kaushal admitted that between August 2015 and January 2017, he conspired with Thrane to defraud Victim Company 1 by submitting fraudulent payment requests for work purportedly performed by the Thrane companies, which Kaushal reviewed and approved for work that had not been completed.
After Victim Company 1 discovered the overbilling in December 2016, Kaushal and Thrane attempted to conceal the scheme to defraud through various means.
Victim Company 1 eventually initiated civil litigation against Kaushal and Thrane, and obtained a default judgment against Kaushal of $1,740,330.
Kaushal then filed for Chapter 7 bankruptcy.
During a meeting of creditors in the bankruptcy proceeding, Kaushal testified that he had used some of the proceeds of the fraud to purchase a condominium in India for a family member and that he had lost more than $100,000 gambling at various casinos.
Kaushal was unable to account for more than $1 million of the kickback payments he received from Thrane. On May 15, 2019, the Bankruptcy Court entered a default judgment against Kaushal, denying him a discharge.
From approximately September 2015 to December 2016, Victim Company 1 paid the Thrane companies approximately $3,294,675.34 as a result of the scheme to defraud.
Kaushal admits that the loss attributable to him as a result of the scheme is between $1.5 million and $3.5 million.
Ivan Victor Thrane, 65, of Dickerson, Maryland, pleaded guilty to his role in the scheme on August 22, 2019. Judge Grimm has not yet set a date for his sentencing.
Kaushal remains detained according to the press release from the U.S. Attorney for the District of Maryland.