SACRAMENTO—United States Attorney
Benjamin B. Wagner announced that a federal grand jury returned a 19-count
indictment charging Mohammad Nawaz Khan, 56; Mohammad Adnan Khan, 32; Iqila
Begum Khan, 31, all of Live Oak; and Mohammad Shahbaz Khan, 56; Gurdev Kaur
Johl, 67; and Kewal Singh, 74, all of Yuba City, with defrauding the state of
California of more than $5 million. This investigation is ongoing to determine
the full extent of the fraud.
According to the indictment, the
defendants sold paystubs to other individuals that falsely showed those
individuals had been paid wages by a company controlled by the defendants. The
buyer would then use that paystub to file for unemployment benefits, disability
benefits, or both. The defendants generally charged $250 for every $1,000 in
wages. Over the course of the conspiracy, the defendants reported wages for
over 400 separate individuals that resulted in more than 2,000 fraudulent claims.
The defendants are scheduled to be
arraigned on the charges on May 15, 2012 at 2:00 p.m. Mohammad Nawaz Khan has
been detained pending trial as a flight risk. The other defendants have been
released on bond.
This case is the product of an extensive
investigation by the Federal Bureau of Investigation; the United States
Department of Labor, Office of Inspector General; and the Investigation
Division of the California Employment Development Department. Assistant United
States Attorneys Jared C. Dolan and Kevin C. Khasigian are prosecuting the
case.
If convicted, the defendants face a
maximum statutory penalty of 20 years in prison and a $250,000 fine for each
count. The actual sentence, however, will be determined after conviction at the
discretion of the court after consideration of any applicable statutory factors
and the Federal Sentencing Guidelines, which take into account a number of
variables. The charges are only allegations. Each of the defendants listed is
presumed innocent, unless and until proven guilty.
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