Minnesota executives sentenced for orchestrating multimillion-dollar fraud
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(Vecteezy)
Two medical services company executives were sentenced to prison on Monday, July 15 in federal court for their roles in a fraud scheme that took place between June and October 2018.
According to court documents, the chief executive officer of Global Medical Services, LLC and Minnesota International Medicine Khemwattie Singh, 53, and the chief medical officer of Global Medical Services Neeraj Chepuri, 55, devised a fraud scheme by entering into factoring contracts with a Florida-based investment company to purchase the accounts receivable of Global Medical Services and Minnesota International Medicine for more than $2.6 million.
“Factoring is a form of short-term financing in which a business sells its accounts receivable to a third-party at a discount,” explained Tasha Zerna, a public affairs officer with the United States Department of Justice. “According to court documents, Singh and Chepuri defrauded the investment company by failing to payover the receivables as they were collected and falsely represented that no funds had been received. Instead, Singh and Chepuri pocketed the money and wired more than $5 million overseas.”
Singh also failed to filed quarterly payroll tax returns or pay over the withheld amounts and the employer’s contribution to FICA.
She pleaded guilty to one count of wire fraud and one count of willful failure to account for and pay over payroll taxes for withholding federal taxes from employee payroll on December 29, 2023.
She was sentenced to 27 months for the factoring fraud scheme and 12 months for the tax fraud, to be served concurrently. She was also ordered to pay $3,957,364.62 in restitution to her victims.
Chepuri pleaded guilty to one count of wire fraud, also on December 29, 2023, and has been sentenced to 21 months in prison, one year of supervised release, and ordered to pay full restitution in the amount of $3,265,363.14.