Indian-American businessman arrested for defrauding lenders
Washington: An Indian-American businessman, who previously owned a popular jewellery chain in Boston, has been arrested at the Los Angeles International Airport on his return from India on charges of defrauding his former lenders.
Handa, 67, was produced before a US court in Los Angeles on Friday following the arrest this week. He would eventually be brought to Boston for a formal trial.
A 2011 indictment unsealed on Thursday charges Handa with 12 counts of wire fraud.
According to the indictment, Handa owned the Alpha Omega Jewellers, a watch and jewellery retailer in the Boston-area.
From May 2007 to December 2007, Alpha Omega experienced severe financial troubles, and had difficulty keeping current with loans it had with several banks.
Handa allegedly fabricated inventory on reports that were submitted to the banks as part of the scheme to defraud Alpha Omega’s lenders and in order to obtain additional loans.
These reports were used by the banks to calculate the credit limit for Alpha Omega, and included inventory such as luxury watches and high-end items from Indian jewellery vendors, that Alpha Omega never in fact possessed.
On December 15, 2007, Handa and his family abruptly left the US. After discovering Handa’s departure, Alpha Omega’s lender took control of the company and conducted a detailed review of Alpha Omega’s inventory.
According to the indictment, the review revealed over USD 7 million in missing or unaccounted for inventory.
The charge of wire fraud provides for a sentence of no greater than 20 years in prison, three years supervised release and a fine of USD 250,000 on each count, the FBI said in a statement.