Indian-American jailed for conspiring to defraud company of $2.5mn
What's the story
An Indian-origin man in the US has been sentenced to over four years in prison and fined for conspiring to defraud a company of $2.5 million. Debashis Ghosh, 54, of Chicago and Keith Eric Jergensen, 58, of Salt Lake City, Utah, were convicted in October 2017 of wire fraud conspiracy following a seven-day trial presided over by US District Judge Brenda K Sannes.
Information
Ghosh to pay $2.5 million in restitution to his victims
Judge Sannes also ordered Ghosh to pay $2.5 million in restitution to his victims. Ghosh was sentenced to 57 months in prison and Jergensen to 59 months, to be followed by three years of supervised release.
Investment
Convicts asked Laurentian Aerospace Corporation to invest $2.5 million
Jergensen and Ghosh were co-CEOs of Chicago-based Verdant Capital Group. New York-based firm Laurentian Aerospace Corporation had retained Verdant to raise funds for construction of an airplane maintenance, repair, and overhaul facility to be built at the former US Air Force base in Plattsburgh, according to the evidence. Jergensen and Ghosh asked Laurentian to invest $2.5 million as seed money for the project.
Information
Jergensen and Ghosh misappropriated an additional $2.4 million
The convicts and Laurentian agreed this money would remain in a Wells Fargo account and couldn't be moved without Laurentian's authorization. The evidence at trial also demonstrated that Jergensen and Ghosh misappropriated an additional $2.4 million in funds that other businesses had entrusted to them.
Transfer
Convicts transferred the whole amount from Wells Fargo account
Laurentian, drawing on funds contributed by its board members and one outside investor, wired $2.5 million into the Wells Fargo account in December 2010. However, five days later, Jergensen and Ghosh began transferring the money out of the account without Laurentian's authorization, and by March 2011 they had transferred all of the $2.5 million out of the account.
Expenses
Jergensen and Ghosh used Laurentian's money to pay Verdant's expenses
The two convicts Jergensen and Ghosh used Laurentian's $2.5 million to pay Verdant's expenses. Expenses included payment of employees and contractors, and to pay others, including payments totaling $1.75 million to a now-defunct wind turbine company that Ghosh was a minority owner of and payments totaling $14,500 to an Arizona man who was promising them access to union pension funds.
Assurance
Jergensen-Ghosh gave false assurance that Laurentian's money was safe
Having spent the money, and as part of their conspiracy, Jergensen and Ghosh then spent several years falsely assuring Laurentian and its investors that their money was safe and secure. Jergensen went so far that he even forged a memorandum of understanding that purported to show that Laurentian's money was in a secured bank account at Wells Fargo.