3 Indian Americans Indicted in Maryland for Scheme to Fraudulently Obtain Bank and Small Business Administration Loans
- Lead defendant Mehul Ramesh Khatiwala also faces a charge known as the financial crime kingpin statute, used in the state for the first time.
An Indian American man is among five charged in Maryland for a fraud scheme intended to obtain over $35 million from financial institutions by providing false documentation in support of SBA loan applications for the purchase of hotels, the Department of Justice announced yesterday (Nov. 8). Lead defendant, Mehul Ramesh Khatiwala, a/k/a “Mike Khatiwala,” 41, of Voorhees, New Jersey, also faces a continuing financial crimes enterprise charge, also known as the financial crime kingpin statute,” the DOJ said. This is the first time this statute has been charged in Maryland.
Four others, including two Indian Americans, are charged with Khatiwala in the indictment “with bank fraud, making false statements to financial institutions, and money laundering,” the DOJ said. They include Rajendra G. Parikh, 63, of Monroe, New Jersey; Rajnikant I. Patel, 59, of North Brunswick, New Jersey; Jennifer H. Watkins, 47, of Marlton New Jersey; and Rebecca Marie Cohn, a/k/a Rebecca Marie Stanton, 36, of Fallston, Maryland.
Khatiwala was the owner and managing member of Delaware Hotel Group LLC., and an operator of GMK Consulting LLC and KPG Hotel Mgmt. LLC., which were hotel management and loan brokerage companies located in Mount Laurel, New Jersey. Watkins was a project coordinator for DHG and a managing member of Forza Consulting LLC., a hotel consulting and loan brokerage company located in Marlton, New Jersey. Parkih owned KPG and Cohn was a settlement and title processor for Residential Title & Escrow Company. The real estate title company located in Owings Mills, Maryland, offered escrow and loan settlement services. Patel worked as the manager of a convenience store owned by Parikh and Parikh’s brother.
Rajnikant Patel and Jennifer Watkins were scheduled to have their initial appearances today (Nov. 9) in U.S. District Court in Baltimore before U.S. Magistrate Judge A. David Copperthite. Cohn had her initial appearance on Nov. 6, while Khatiwala and Parikh had initial appearances in the U.S. District Court in New Jersey on Nov. 3, and were ordered to be detained.
The indictment alleges that from August 2018 until February 2020 the defendants conspired to obtain loan proceeds for the defendants and others to buy and sell hotels in a hotel flipping scheme. They did this by making material misrepresentations and omissions to financial institutions during the loan application process as injected by the borrowers, under the SBA’s Section 7(a) Program.
Specifically, the indictment alleges that Khatiwala, Parikh, and Watkins created shell companies using Patel and a co-conspirator as the straw owners of the companies. They “collected, compiled, and submitted documentation needed by financial institutions to determine whether the buyers qualified for the SBA loans, the DOJ said. They then fraudulently diverted some of that money to make down payments on hotels that were under contract to shell companies controlled by Khatiwala and Parikh. Additionally, they “diverted loan proceeds intended for the buyers to purchase hotels from the shell companies so that the shell companies could first purchase the property and then flip it to the buyer.”
If convicted, Khatiwala faces a mandatory minimum sentence of 10 years and up to life in prison for a continuing financial crime enterprise. All of the defendants face a maximum of 30 years in federal prison for the conspiracy to commit bank fraud and for each count of bank fraud; and a maximum of five years in federal prison for a conspiracy to make a false statement to a financial institution.
Khatiwala, Parikh, Watkins, and Cohn also face a maximum of 30 years in federal prison for each count of making a false statement at a financial institution and a maximum of 10 years in federal prison for conspiracy to launder money and for each count of money laundering.