NRI convicted of $1.7 mn fraud in US
Bhatia lured investors by claiming business connections with Bill Gates, reports S Rajagopalan.india Updated: Mar 06, 2006 13:05 IST
‘Bhatia’. That famous surname was the only thing Lal Bhatia shared with Sabeer Bhatia.
The Hotmail founder testified in court, saying he wasn’t related to Lal Bhatia, an NRI businessman convicted of fraud.
The California-based Lal Bhatia, who claimed business connections with the likes of Microsoft chief Bill Gates, Dell Computers chairman Michael Dell and Sabeer Bhatia, has been convicted of duping investors of more than $1.7 million (Rs 7.65 crore).
The 'big-talking' Bhatia, 38, has been held guilty of nine counts of mail fraud and 18 counts of money laundering. Each mail fraud count is punishable by up to 20 years in prison, a fine of up to $250,000 and restitution of investors' funds. And each money-laundering count is punishable by up to 10 years and a fine of up to $ 250,000.
As CEO of a company called ABE Technologies Inc., Bhatia had lured investors to part with huge sums by making a series of false representations.
That, according to the US attorney's office, included claims that Gates, Dell and Sabeer Bhatia were investing in or purchasing ABE.
Evidence presented at the trial exposed Bhatia's claims. Sabeer Bhatia, testifying in the case, said he has never met or done business with the defendant.
Jurors found that Bhatia had illegally engaged in monetary transactions derived from his scheme to defraud investors. It was also brought out that Bhatia had made claims that his scheme on preferred shares had the backing of a multi-billion dollar Swiss banking entity that turned out to be fictitious.
US district judge Claudia Wilken set September 11 for sentencing.
The prosecution followed a joint investigation by the Federal Bureau of Investigation, the Internal Revenue Service's Criminal Investigation Division and the US attorney's office.