TRENTON – Three men and the companies that they operated have been indicted on first-degree conspiracy and money laundering charges for allegedly defrauding five freight brokers out of $2.6 million through an elaborate shipping scam, Attorney General Paula T. Dow and Criminal Justice Director Stephen J. Taylor announced. The indictment also charges the men and two of their wives with failure to file state income tax returns.
The Division of Criminal Justice Financial and Computer Crimes Bureau obtained a state grand jury indictment charging the following defendants with conspiracy (1st degree), theft by deception (2nd degree), and two counts of money laundering (1st degree):
· Fazal Din, 49, whose last known address was in Dayton;
· Rajendra Patel, 54, whose last known address was in Jersey City;
· Kulwinder Dhaliwal Singh, 43, whose last known address was in Monroe;
· National Freight, doing business as PRP Enterprises, which was located in Dayton;
· National Freight Solutions, LLC, which was located in Dayton;
· Diamond Freight Solutions, LLC, which was located in Edison;
· Golden Star Express Corporation d/b/a Prime Time Freight, which was located in North Brunswick;
· PRP Enterprises, a federally licensed motor carrier, which was located in Jersey City.
In addition, all three men, Din’s wife Rahila Khan, 42, and Singh’s wife Neelam Tibrewal, 38, are charged with failure to file a New Jersey gross income tax return, a third-degree offense. The indictment was voted yesterday, but filed with the court today. All of the individual defendants are fugitives. They are being sought on arrest warrants issued in connection with the indictment.
“We allege that these defendants had their own companies on both sides of fraudulent shipping transactions, with unsuspecting freight brokers caught in the middle.” said Dow. “They allegedly ripped off the brokers both coming and going to the tune of $2.6 million.”
“We charge that this was a complicated scam that involved over a thousand transactions and millions of dollars,” said Taylor. “As con artists have become more sophisticated and have exploited opportunities for fraud on the Internet, we have stepped up our efforts to detect and prosecute such white collar criminals through our Financial and Computer Crimes Bureau.”
Freight brokerage companies are paid a fee for serving as “middle men” between companies that need freight moved and carriers that agree to move the freight. They arrange for shipment of goods, collect payment from the company shipping the goods, and pay the carrier that moves the goods. Such brokers will extend credit to companies that regularly ship goods through them. The defendants allegedly ran a scam, similar to what is known as a “bust out,” in which they built up a line of credit with the brokers and then used that credit to defraud the brokers.
What was unusual about this scheme was that the defendants allegedly engaged in transactions in which one of their companies – either Prime Time Freight or Diamond Freight Solutions – contracted with the freight broker to ship goods from California to New Jersey, and another one of their companies – PRP Enterprises – responded to the Internet job notice posted by the broker and was hired as the freight carrier that moved the goods. The brokers were unaware of the connection between the companies involved in the transactions. Because of the line of credit, the broker would pay PRP before the broker was paid by Prime Time or Diamond Freight.
The defendants initially gained the confidence of the brokers and built up a line of credit by moving some actual freight using independent drivers and major freight carriers. But PRP eventually stopped moving actual freight, while allegedly continuing to submit and be paid for fictitious invoices with falsified supporting documentation. Prime Time and Diamond Freight contracted with the brokers for a total of 1,217 shipments.
Din, Patel and Singh allegedly laundered the illicit proceeds of the scheme through a complex scheme involving moving money between their companies and making payments to relatives and other individuals to whom they had ties.
Part of the money paid to PRP by the five freight brokers was allegedly transferred through a series of transactions to Prime Time and Diamond Freight and ultimately used by those companies to, in essence, pay the brokers with their own money, officials said. However, ultimately, Prime Time and Diamond Freight allegedly failed to pay $2.6 million that they owed to the five freight brokers. The brokers paid approximately $3.9 million to PRP. They received only about $2.1 million in payments from Prime Time and Diamond Freight out of the total of about $4.7 million which the two companies owed under their contracts, officials said.
The case was presented to the state grand jury by Deputy Attorney General Francine S. Ehrenberg. The investigation was conducted for the Division of Criminal Justice Financial and Computer Crimes Bureau by Lt. James MacInnes, Detective Sgt. Robert Walker, Analyst Amy Patterson and Deputy Attorney General Ehrenberg. They were assisted by Auditor Charlene R. Singleton of the New Jersey Division of Taxation.
First-degree charges carry a maximum sentence of 20 years in state prison and a $200,000 fine, while second-degree charges carry a maximum sentence of 10 years in state prison and a $150,000 fine. The money laundering counts carry an enhanced fine of $500,000, plus an additional anti-money laundering profiteering penalty of $500,000. Third-degree charges carry a maximum sentence of five years in state prison and a $15,000 fine.
The indictment was handed up to Superior Court Judge Pedro J. Jimenez Jr. in Mercer County, who assigned the case to Hudson County.
Officials are asking anyone with information about the whereabouts of the defendants to report that information confidentially by calling Lt. James MacInnes at the Division of Criminal Justice Confidential Tipline: 1-866-TIPS-4CJ.
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