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TRENTON
- Attorney General Paula T. Dow and Criminal
Justice Director Stephen J. Taylor announced
that 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. The indictment also charges
the men and two of their wives with failure
to file state income tax returns.
According
to Director Taylor, 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, N.J.;
- 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
Attorney General 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 Director
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 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 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 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. 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.
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.
The indictment is merely an accusation and
the defendants are presumed innocent until
proven guilty.
Anyone
with information about the whereabouts of
the defendants is urged 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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