Gujarati tycoon in US fraud
NRI charged on five counts including bank and wire fraud

An Indian American businessman, who specialised in developing rent-to-own houses, has been charged with fraud and money laundering that may have cost investors' upto $10 million.

Yogesh Shah of Milwaukee was named in the indictment and charged with five counts of fraud, including bank and wire fraud and money laundering, federal prosecutors said.

"Shah, head of the now bankrupt 1043 Development corporation who had investors and banks lend him money, started the fraud sometime in April 1998," assistant US attorney Steven M. Biskupic said.

Mr. Biskupic said Shah's assets had been frozen by an order of the court.

Federal prosecutors started the investigation sometime in the middle of 1999 when the company also went bankrupt.

"The investigations were basically prompted by complaints from investors", a spokesman at the US attorney's office said.

Shah, who made his first court appearance on December 21^st, has pleaded not guilty, the spokesman said, adding that he has been released on a bail of $10,000 which was posted by his friend.

The spokesman said Shah has a trial date scheduled for February 29.

He said the US Attorney's office is scheduled to meet with investors or people who purchased and leased property from 1049 Corporation on January 14 to get more information about the investments as well as give details about the case.

According tot a report, Shah ran 1043 and several other companies, including 1043 Arizona Properties, Creative Custom Homes and Creative Realty Inc. while the scheme was going on.

The indictment alleged that Shah's operation relied on "false and fraudulent pretenses, representations and promises' about the entities, the circumstances of financial transactions and the security pledged to obtain financing.

According to the report, FBI special agent Terry Sparacino said in an affidavit filed in support of the government's request that Shah and members of his family got more than $300,000 either directly or indirectly from 1043 during the year before the bankruptcy filing.

"Yet on bankruptcy schedules, Shah listed transfer to himself and family members during that period as under $10,000," according to the affidavit.

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Republished from Asian Age