Lal Bhatia of California convicted of $ 1.7 million
California, March 6, 2006
NRI, Lal Bhatia of California, who claimed business
connections with Microsoft chief Bill Gates, Dell
Computers chairman Michael Dell and Sabeer Bhatia,
has been convicted of duping investors of more than
NRI, Sabeer Bhatia, the Hotmail founder testified
in court, saying that he wasnt related to Lal
Bhatia and never met or done business with the defendant.
The jury, after deliberating approximately three
hours, found that the defendant had employed a scheme
to defraud investors of over $1,728,000. The jury
also found that Bhatia had illegally engaged in monetary
transactions with funds derived from the scheme. The
guilty verdict followed a jury trial of over two weeks
before U.S. District Court Judge Claudia Wilken.
Claudia Wilken, US district judge 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
- He 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.
- Each money-laundering count is punishable by up
to 10 years and a fine of up to $ 250,000.
- Bhatia, under the business name ABE Technologies
Inc., allegedly lied to investors to get them to
buy ABE preferred stock -- telling them that people
such as Microsoft CEO Bill Gates, Dell CEO Michael
S. Dell and executives of Allied Boston were investing
in ABE; telling them their investments were "200
percent" guaranteed; and assuring them he'd
registered an Initial Public Offering with the Securities
and Exchange Commission.
He allegedly received at least $800,000 from
four investors; one person who'd sent him $200,000
later received a check from him for $250,000 --
but it bounced.
April 22, 2004
United States Attorney Kevin V. Ryan for the Northern
District of California announced that Lal Bhatia,
age 36, of Walnut Creek, California, was arraigned
yesterday in federal court before U.S. Magistrate
Judge Wayne Brazil on an indictment returned by a
federal grand jury on April 15, 2004, charging him
with eight counts of mail fraud in violation of 18
U.S.C. § 1341 and one count of money laundering
in violation of 18 U.S.C. § 1957(a).
According to the indictment, Mr. Bhatia, acting under
the business name ABE, induced investors to make investments
in ABE preferred shares of stock by making a number
of false representations. The false representations
included false statements to investors that prominent
persons in the business community, including Bill
Gates of Microsoft and Michael Dell of Dell computers,
were investing in ABE. Allegedly, Mr.Bhatia falsely
stated that prominent executives of the company Allied
Boston International had invested large sums of money
in ABE. Mr. Bhatia is also alleged to have falsely
promised substantial returns on the investments and
assured investors that he had registered an Initial
Public Offering with the Securities and Exchange Commission.
The maximum statutory penalty for each count in violation
of 18 U.S.C. § 1341 is 20 years imprisonment,
a fine of $250,000, three years of supervised release,
a special assessment of $100, and restitution of the
investors' funds. The maximum statutory penalty for
the count alleging a violation of 18 U.S.C. §
1957(a) is ten years imprisonment, a fine of $250,000,
three years of supervised release, and a special assessment
of $100. However, any sentence following conviction
would be dictated by the Federal Sentencing Guidelines,
which take into account a number of factors, and would
be imposed in the discretion of the Court. An indictment
simply contains allegations against an individual
and, as with all defendants, Mr. Bhatia must be presumed
innocent unless and until convicted.
Mr. Bhatia was arraigned before U.S. Magistrate Judge
Wayne D. Brazil on April 21, 2004, and released on
a $1 million bail with a condition that his movements
be monitored electronically. The defendant's next
scheduled court dates are May 3, 2004, at 10:00 a.m.
for further bail proceedings before U.S. Magistrate
Judge Brazil and May 10, 2004, at 2:00 p.m. for an
initial appearance before U.S. District Judge Claudia
Wilken who will preside over the case. Both appearances
are to take place in the Oakland federal courthouse.
The prosecution is the result of a joint investigation
conducted by agents of the Federal Bureau of Investigation
and the Internal Revenue Service Criminal Investigation
Division. Krystal Bowen is the Assistant U.S. Attorney
who is prosecuting the case with the assistance of
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