Indian American Transportation Engineer Sentenced to 44 Months in Connection With Ponzi Investment Scheme
- Kumar Arun Neppalli of Cary, North Carolina, relied on his good standing within the Indian American community to defraud numerous victims under the false pretense that he would invest their money in a legitimate real estate development.
Transportation engineer Kumar Arun Neppalli of Cary, North Carolina, was sentenced to 44 months in federal prison in connection with a Ponzi investment fraud scam. The 57-year-old Indian American, who pleaded guilty in September to 17 counts of wire fraud, is also ordered to pay almost $1 million in restitution to the victim, according to court documents.
Citing a 2021 investigation, News & Observer reported that Neppalli was “accused of bilking 15 investors out of $1.9 million in business loans that he acquired through his connections with the Triangle’s Indian community.”
He resigned from his traffic planning job with the town of Chapel Hill in November 2021, after filing for Chapter 7 bankruptcy
According to court documents, Neppalli relied on his “good standing within the Indian American community in Cary to defraud numerous victims under the pretense that he would invest their money in a legitimate real estate development in the Orange County area.” He leveraged his employment with the town of Chapel Hill to convince the victims that he had insider knowledge of development plans concerning the purported real estate.
He would request a specific amount of money within a short timeframe, sometimes the same day, to facilitate closing the transaction, and “promised a return of the principal investment plus a profit within a few months.” He often asks his victims not to discuss the transaction with other members of the community or reference a non-disclosure agreement. He used the funds from these victims to pay back earlier investors who believed he was returning their original investment and legitimate capital gains.
“Neppalli was a conman running a classic ‘affinity fraud,’ targeting Indian American investors in the Triangle for their hard-earned savings,” said U.S. Attorney Michael Easley. “It was a pure Ponzi scheme — stoking false hopes of financial success but using new investor money to pay off earlier investors while masquerading those payments as legitimate profits. Investors should beware affinity fraudsters like Neppalli promising outsized returns on short timelines while exploiting membership in a particular religious or ethnic group to gain credibility and target victims.”
Neppalli who had worked for the town since 2000, previously served as vice president and president of the Triangle Area Telugu Association, and as a former board member with the Hindu Society of North Carolina. He also served 11 years as president of his Twin Lakes Master Association in Cary.