Pakistani American Saquib Khan had ties to the Mafia too.
Bureau Report
NEW YORK: In one of the largest check-fraud schemes anywhere in the country in recent years, a Pakistani American businessman, known as the deli king of Staten island, and who had ties to the Mafia, is alleged to have defrauded banks of $82 million using a simple scheme: depositing worthless checks in his own name, then drawing the real money available and transferring it elsewhere.
Saquib Khan, 51, was in financial trouble because Hurricane Sandy had devastated his businesses, leaving him unable to pay his bills. His mob ties had been exposed in federal court, and his financial maneuvering had just come under scrutiny by auditors, reported The New York Times.
To get his way out of trouble, Khan wrote hundreds of checks to himself, then raced across the city from bank to bank to deposit them in accounts under his name or those of his businesses. He took advantage of the willingness of banks to allow some customers to overdraw their accounts temporarily, prosecutors said.
The criminal complaint also sheds light on Khan, one of those extraordinary characters nurtured by the city, an immigrant whose life of operatic twists has wound through tribal Pakistan, Staten Island strip malls, fund-raisers for Hillary Rodham Clinton and underground gambling halls, said the report.
The banks have recovered most of the $82 million, officials said. More than $11 million of the money that Khan withdrew is now frozen in an account to be distributed to the banks to help repay their losses, his lawyer said. It appears he spent at least $2 million of the money before he was arrested on December 13, according to interviews and the criminal complaint, which was brought by the United States attorney’s office in Brooklyn.
Khan is free on $500,000 bail and trying to arrange a plea bargain with prosecutors, according to court records. His lawyer said that Khan was only trying to save his business, and that he was working hard to pay back the banks.
Khan comes from a prominent family in Pakistan — relatives said he was a favorite nephew of Bashir Ahmad Bilour, a well-known politician who spoke out against the Taliban. Bilour was killed in a suicide attack in late December. Trained as a doctor, Khan came to the United States in the 1980s, but ended up working with his sister and her husband, who owned some two dozen delis across Staten Island.
From there, Khan set out on his own, building up Richmond Wholesale Company, a cigarette and grocery business that recorded $125 million in sales last year, according to Dun & Bradstreet, a financial information provider. Richmond Wholesale supplies products to delis and gas stations across the New York region, said Times. Khan also owns three delis.
Khan, until recently the chairman of the board of a prominent Staten Island mosque, was known in the borough’s close-knit Pakistani community as a flashy businessman. He once had a mansion in the Todt Hill neighborhood and drove a Mercedes with a license plate that read “SKHAN.”
He was also a generous supporter of politicians of both major parties, giving more than $65,000 to more than 40 campaigns in the last decade, including those of Hillary Clinton, former Representative Anthony D. Weiner, former Gov. Eliot Spitzer and former Gov. George E. Pataki.
As he rose in the business community on Staten Island, Khan developed a close relationship with a soldier in the Genovese crime family, John Giglio, also known as Johnny Bull or Fat John, according to the court testimony. Khan earlier testified that he had used that connection to pressure at least one reluctant deli owner to sell his business to him.
Through Giglio, Khan said he met other high-ranking organized crime figures in gambling halls, though he was never charged in connection with these relationships.
Prosecutors who put together the recent criminal complaint against Khan said his fraud was an outsized version of a familiar swindle – check kiting – in which the thief takes advantage of the time it takes for banks to clear checks, said the Times report.
Auditors at some of the banks — including Capital One, M & T Bank and Flushing Savings Bank – realized what was going on. Khan blew the whistle on himself, alerting the banks that he had withdrawn far more than was in his accounts and planned to pay it back. The banks declined to comment, and several civil lawsuits against Khan are pending, said Times. For now, Khan is working to stave off the charges and pay back the banks any way he can, including selling his business — the final twist in the deli king’s fall.
Khan’s arrest has also caused turmoil at the mosque where he was chairman, Muslim Majlis of Staten Island. He resigned late last month. He was once well respected there. Now, mosque leaders are sharply divided in their feelings toward him. A founder of the mosque recently resigned from its board after 33 years because of the taint of the Khan case.