New Jersey Man Pleads Guilty to Federal Charges for $3.5 Million Bank Fraud Scheme
Baltimore, Maryland – Mehul Khatiwala, age 37, of Voorhees, New Jersey, pleaded guilty today to conspiracy to commit bank fraud and to three counts of bank fraud, in connection with a scheme to fraudulently obtain loans from Cecil Bank to purchase hotels and a multifamily residential property, resulting in losses of more than $3.5 million.
The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Robert Manchak of the Federal Housing Finance Agency (FHFA), Office of Inspector General; Special Agent in Charge Patricia Tarasca of the Federal Deposit Insurance Corporation (FDIC); Special Inspector General Christy Goldsmith Romero of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP); and Inspector General Hannibal “Mike” Ware of the Small Business Administration - Office of Inspector General.
“Mehul Khatiwala and his co-conspirators submitted false statements and fraudulent documentation in order to obtain more than $15 million in loans from Cecil Bank, much of which was guaranteed by the SBA.” said U.S. Attorney Robert K. Hur. “The defendants used deceit to steal millions of dollars from the victims, which ended up including not only the bank but the American taxpayers. Federal law enforcement are committed to prosecuting and deterring this type of costly fraud.”
According to his plea agreement, from February 2011 through January 2014, Khatiwala and two co-conspirators executed a scheme to defraud Cecil Bank, the Small Business Administration (SBA), and other financial institutions by misrepresenting material facts in order to obtain financing for the purchase of two hotels and a multifamily residential property. The defendant defaulted on the loans, causing losses to Cecil Bank and the SBA of more than $3.5 million. According to the indictment and information presented at today’s plea hearing, on December 23, 2008, Cecil Bank’s holding company, Cecil Bankcorp, Inc., received an $11.5 million bailout from the Troubled Asset Relief Program (TARP).
Read more: https://www.justice.gov/usao-md/pr/new-jersey-man-pleads-guilty-federal-charges-35-million-bank-fraud-scheme