Total of 28 individuals indicted so far in scheme.
By The American Bazaar Staff
WASHINGTON, DC: Several South Asian origin individuals are among those arrested and indicted for their participation in a huge unemployment and disability benefits fraud scheme in California.
The Sutter County-based scheme used farm labor contracting companies to sell false paystubs that indicated the purchasers had been employed by the companies when it fact they had not. These fraudulent paystubs enabled the purchasers to apply for unemployment and disability benefits to which they were not entitled. The fraud scheme is alleged to have defrauded the California Employment Development Department of more than $14 million, said a press release issued by the Federal Bureau of Investigation (FBI).
The federal grand jury returned a superseding indictment that expands the original charges brought in 2012 against six defendants. The grand jury also returned a new indictment charging one of those defendants and another man with starting a new scheme to sell false wages. Two new defendants were also charged in that indictment with committing perjury before the investigating federal grand jury.
The superseding indictment charges that Mohammad Nawaz Khan, 56; Mohammad Adnan Khan, 31; Iqila Begum Khan, 31, all of Live Oak; and Mohammad Shahbaz Khan 56, of Yuba City, controlled a series of companies that were reported to the Employment Development Department as farm labor contractors. The Khans, together with Gurdev Kaur Johl, 69, and Kewal Singh, 76, both of Yuba City, who were also charged, sold fake paystubs to other people in the community and used the companies they controlled to report false wages for the individuals who purchased those paystubs.
According to the superseding indictment, the Khans at times instructed the purchasers how the fake paystubs could be used to fraudulently claim unemployment and disability benefits. Over the course of the conspiracy, which allegedly began in the early 1990s, the defendants reported false wages for more than 1,000 separate individuals that resulted in more than 2,000 fraudulent claims for unemployment and disability benefits, said the FBI.
The new indictment charges that while out on bond for the first indictment, Mohammad Shahbaz Khan began a new conspiracy with Mohammad Riaz Khan, aka Ray Khan, 53, of Live Oak, to commit unemployment and disability fraud. It is alleged that Mohammad Riaz Khan issued checks to his supposed employees and directed those individuals to cash the checks and return the money to him in order to make it appear that the individuals were actually being paid wages by Mohammad Riaz Khan. Also in that indictment, Harmit Chechi, 27, of Yuba City, and Harjit Johal, 47, of Yuba City, are charged with committing perjury before a federal grand jury in connection with that investigation. Mohammad Riaz Khan, Mohammad Shahbaz Khan, Chechi, and Johal were arrested last week.
This latest indictment brings the total to 28 individuals who have been charged in this investigation. Thirteen have pleaded guilty to various charges.
If convicted, each defendant faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for each count. Chechi and Johal face a maximum statutory penalty of five years in prison for perjury.