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NRI, Lal Bhatia of California convicted of $ 1.7 million fraud

California, March 6, 2006
Ram Parsad

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 $1.7 million

NRI, Sabeer Bhatia, the Hotmail founder testified in court, saying that he wasn’t 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
Gary Singh

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 Cynthia Daniel.

 

* http://www.usdoj.gov/usao/can/press/html/2004_04_21_bhatia.html

*http://www.insidebayarea.com/portlet/article/html/fragments/print_article.jsp?article=cps_65153

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