Washington: A 44-year-old Indian-American former CEO has been charged with two separate fraud schemes totalling more than USD 30 million and faces a maximum statutory sentence of twenty years in prison for each count.
Navin Shankar Subramaniam Xavier, who has been charged by Indictment with 15 counts of wire fraud. He was CEO of Essex Holdings Inc.
According to the Indictment, from September 2010 through May 2014, Xavier operated Essex Holdings, raised more than USD 29 million from nearly 100 investors for supposed investments in sugar transportation and shipping, as well as iron ore mining in Chile.
Xavier used a false financial statement, forged documents, and false promises of fixed rates of return, to induce investors to invest with Essex Holdings, federal prosecutors alleged.
"Most of the money was used for purposes other than what was promised, including to support lavish spending by Xavier and his wife for expensive jewelry, luxury vehicles, wedding expenses, and cosmetic surgery," the Justice Department said.
Eventually, Xavier used new investor money to pay old investors in a Ponzi-like fashion before the scheme collapsed, it added.
The second scheme involved Xavier using Essex Holdings to obtain USD 1.2 million in payments and approximately USD 1.5 million worth of commercial real estate from the South Carolina Coordinating Council for Economic Development (SCCCED), a division of the South Carolina state government, that was supposed to be used to develop a dilapidated industrial property into a diaper plant and rice packaging facility.
According to the indictment, Xavier provided false financial documentation to SCCCED in order to obtain the contract, and later provided fake contractor invoices and fake bank statements in order to get paid under the contract.
As with the investment fraud scheme, Xavier spent the development money for his personal living expenses, and wired some of it to the same overseas accounts used in the investment fraud, federal prosecutors said.
He faces a maximum statutory sentence of twenty years in prison for each count and a fine up to USD 250,000....