Indian-origin consultant arrested in multi-million-dollar fraud
New York, Jan 20: An Indian-origin consultant has been arrested for participation in a multi-million-dollar fraud that falsely billed a heath and retirement fund, New York federal prosecutor Preet Bharara announced on Thursday.
Shivanand Maharaj conspired to submit false invoices to the fund "for consulting work never actually performed", Bharara said. The co-head of information technology at the fund, Enrico Rubano, approved the payments and received a cut, he added.
Bharara said, "Money that should have gone to help pay retirement and health care benefits were instead allegedly diverted to Rubano and Maharaj."
They were charged with conspiracy to commit wire fraud for their use of electronic communications to carry out the alleged scheme. The court complaint said the amount involved was over $3.4 million. They were to be produced before federal Magistrate Judge Andrew J. Peck later on Thursday.
The invoices used in the alleged scheme that ran from 2009 to 2015 were for work not done at all or which were done by the fund's employees or other companies and most of the invoices were for less than $5,000 each, according to court documents.
The health and retirement fund that Rubano worked for was not identified by name in Bharara's statement or in the court document.
The document said that the two of them had also used a third person with no background in IT to submit fake invoices and give them kickbacks. That person, who was not identified, was described as a cooperating witness or approver, who will not be prosecuted in return for government cooperation.