Indian American Transportation Engineer Indicted on 23 Counts of Wire Fraud and Money Laundering
- Kumar Arun Neppalli of Chapel Hill faces up to 20 years in prison per count and potential fines.
A North Carolina man was arrested this week in connection with an investment fraud scam. Kumar Arun Neppalli, 56, of Cary, worked as a former Chapel Hill transportation engineer, was indicted on 23 counts of wire fraud and money laundering in a Ponzi scheme, faces up to 20 years in prison per count and potential fines, the Department of Justice said in a Jan. 17 press release.
According to the indictment, Neppalli allegedly relied on his good standing within the Indian American community in Cary “to defraud at least 12 victims or sets of victims into giving him funds under the false pretense that he would be investing their money in a legitimate real estate development in the Orange County area” in the state, the DoJ said.
He allegedly used the funds from these victims to pay back earlier investors who believed that he was returning their original investment and legitimate capital gains. Returning capital to earlier investors by defrauding new investors is commonly known as a “Ponzi” scheme.
The indictment further alleged that Neppalli would typically contact the victims on the telephone or in-person to describe a local real estate investment opportunity, usually in Orange County. He allegedly leveraged his employment with the town of Chapel Hill to convince victims that he had insider knowledge of development plans with respect to the purported real estate.
“He would then request a specific amount of money within a short timeframe, sometimes the same day, to facilitate closing the transaction,” the DoJ said. Additionally, he would “allegedly promise a return of the principal investment plus a profit within a few months and sometimes ask his victims not to discuss the transaction with other members of the community or reference a non-disclosure agreement.”
Neppalli was indicted on 17 counts of Wire Fraud and 6 counts of Conducting Transactions in Criminally Derived Property. Arraignment before United States District Judge Terrence W. Boyle is expected to occur later this year.