CEO of Florida Financial Firm Arraigned on Fraud Charges in $17 Million Sham Loan Scheme
CHICAGO—The chief executive of a Florida financial firm was arraigned today on federal fraud charges for allegedly selling $179 million in sham loans to a Milwaukee investment company.
NIKESH A. PATEL, the chairman and CEO of Orlando-based First Farmers Financial LLC, forged signatures and produced false documents to create the appearance that approximately 26 government-backed loans had been issued to borrowers in Florida and Georgia, according to an indictment returned earlier this month in federal court in Chicago. The sham loans purported to contain principal amounts ranging from $2.5 million to $10 million, the indictment states. Patel sold the fraudulent loans to a Milwaukee investment firm for $179 million, according to the indictment.
The indictment charges Patel, 32, of Windermere, Fla., with five counts of wire fraud. He pleaded not guilty this afternoon during his arraignment before U.S. District Judge Charles P. Kocoras in Chicago. The next court appearance was scheduled for Jan. 21, 2016, at 9:30 a.m.
Through its Business and Industry Guaranteed Loan Program, the U.S. Department of Agriculture guarantees a percentage of loans issued to borrowers who improve the economic and environmental climate in rural communities. First Farmers obtained certification to participate in the program after Patel submitted false statements to the USDA about his company’s assets and officers, according to the indictment.
The indictment contends that Patel then submitted false statements to the Milwaukee firm to secure the sale of the phony loans. The fabrications included a false guarantee that the USDA had backed a portion of the loans’ principal amounts, according to the indictment. The Milwaukee firm paid $179 million for the loans as an investment vehicle for its list of clients, which included community banks, retirement plans, municipalities, and subdivisions in Illinois and elsewhere, the indictment states. The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; and Jeffrey A. Monhart, Regional Director of the Chicago Regional Office of the U.S. Department of Labor, Employee Benefits Security Administration.
Each count of wire fraud carries a maximum penalty of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greater.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Assistant United States Attorneys Patrick J. King Jr. and Rick D. Young.