Four of Six Arrested on New Indictment in Sutter County Benefits Fraud Case
|U.S. Attorney’s Office August 27, 2012|
SACRAMENTO, CA—Arrests were made today on new charges in a continuing investigation into a fraudulent unemployment and disability benefits scheme based out of Sutter County, United States Attorney Benjamin B. Wagner announced.
“Whether it’s against the employer-funded unemployment insurance program or the employee-funded disability insurance program, fraud is costly to all of us,” said EDD Director Pam Harris. “Our department and its dedicated investigators are committed to detecting and deterring fraud and ensuring justice is served in this case and any other where individuals are cheating a system meant to benefit hard-working Californians and businesses.”
In a 24-count indictment that was unsealed today, a federal grand jury charged Ryan Herbert Smith, 46, of Turlock; Chindo Gharu, 49, of Yuba City; Seema Rajput, 45, of Modesto; Rajinder Kaur Dhillon, 70, of Sacramento; Rajinder Kaur Dhillon 47, of Yuba City; and Balwinder Singh Khangura, 64, of Yuba City and Sacramento, with participating in a scheme to defraud the state of California of unemployment and disability benefits. Smith, Gharu, Rajinder Kaur Dhillon, and Khangura were arrested. The remaining two defendants are expected to self-surrender.
According to the previous indictment, Mohammad Nawaz Khan, 56; Mohammad Adnan Khan, 31; Iqila Begum Khan, 31, all of Live Oak; and Mohammad Shahbaz Khan 56, of Yuba City, controlled a series of companies that were reported to the Employment Development Department as farm labor contractors. The Khans sold fake paystubs to other people in the community and used the companies they controlled to report false wages for the individuals who purchased those paystubs. The Khans at times instructed the purchasers how the fake paystubs could be used to fraudulently claim unemployment and disability benefits. Over the course of the conspiracy, the defendants reported wages for over 400 separate individuals that resulted in more than 2,000 fraudulent claims for unemployment and disability benefits. The loss in this case is over $5 million.
According to the new indictment, Smith, Charu, Rajput, Dhillon, Dhillon, and Khangura purchased paystubs that falsely showed they had been paid wages by companies controlled by the Khans. The defendants would then use that paystub to file for unemployment benefits, disability benefits, or both.
The investigation in this case is ongoing to determine the full extent of the fraud.
This case is the product of a joint investigation by the Federal Bureau of Investigation, the Department of Labor-Office of Inspector General, and the Employment Development Department-Investigations Division. Assistant United States Attorney Jared Dolan is prosecuting the case.
The maximum statutory penalty for mail fraud is 20 years in prison and a $250,000 for each count. The actual sentence, if convicted, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
The charges are only allegations and the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.