A former Bergen County marble and granite wholesaler and his Somerset County partner cooked the books while also posing as customers as part of a $17 million bank fraud, federal authorities allege.
A U.S. District Court judge in Newark allowed the release Monday afternoon of Rajendra Kankariya, 61, of Tenafly, who was the now-defunct company’s president, and his chief financial officer, 44-year-old Rakesh Sethi of Basking Ridge, following their arrests by the FBI.
Property secured bonds of $500,000 for each of them, U.S. Attorney Craig Carpenito said.
Kankariya and Sethi pulled the scam from late 2015 to early 2016, obtaining a $17 million line of credit “to discharge a prior debt and gain working capital” for for Lotus Exim International Inc., Carpenito said.
“The line of credit was to be secured by LEI’s accounts receivable and assets,” the U.S. attorney said. “In reality, LEI’s accounts receivable and assets were insufficient to serve as collateral for the line.”
To conceal the deceit, Kankariya, Sethi and other unnamed co-conspirators “devised a scheme to create fake email addresses on behalf of LEI’s customers so they could pose as those customers and answer the bank’s and outside auditor’s inquiries about the accounts receivables,” Carpenito said.
The balance on several accounts receivable reports were “either inflated or entirely fabricated,” he added.
Carpenito credited special agents of the FBI with the investigation that led to the the charges, which are being handled by Assistant U.S. Attorney Sammi Malek of his Economic Crimes Unit in Newark.
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