Cloudgen LLC has pleaded guilty to commit H-1B visa fraud.

The company is an IT consulting firm that has its US headquarters in west Houston. However, many of its employees are based in Hyderabad, India.

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Between March 2013 and December 2020, the company admitted to recruiting IT workers from India under H-1B visas. An H-1B visa is used to hire foreign workers to fill specialized jobs in the US where resident workers cannot be found. In that time, the company applied for 94 visas.

In Cloudgen’s case, the company submitted forged contracts stating 3rd parties had jobs available for individual Indian nationals. Having then obtained H-1B visas, the company would bring over the Indian nationals to the US, and start looking for other work for them.

Once Cloudgen found work for them, the company would switch the visas to the new employer. Cloudgen took a percentage of the worker’s salary as their fees. It earned approximately $493,516.28 in profits during the course of the conspiracy.

Sentencing is set for September 16. At that time, the company could have to pay up to $500,000 or the greater of twice the gross gain or twice the gross loss as well as a maximum five years of probation.

https://www.justice.gov/usao-sdtx/pr/houston-consulting-company-admits-h-1b-visa-fraud-conspiracy

Marvellous Eghaghe has been arrested in Houston and charged by the US District of Virgin Islands in connection with wire fraud and money laundering schemes.

According to the indictment, Eghaghe created a Texas company and an associated bank account. He used  these to obtain money fraudulently from victims in the Virgin Islands, Alabama, Texas and Columbia. He would set up email addresses very similar to legitimate vendors, thereby diverting funds to the bank account he had created.

In particular, between February 2018 and March 2018, he is alleged to have

• diverted $109,000 of funds intended for the closing of a home in the Virgin Islands.
• forged over $2 million of checks from a business in Alabama.
• diverted $48,000 of funds from a business in Texas.
• diverted $35,000 from a business in Columbia.

Eghaghe appeared to have three co-conspirators, who were not named in his indictment. For the three smaller amounts, Eghaghe diverted most of the funds to himself and his co-conspirators. The indictment also alleges that $25,000 of the $2 million was transferred to a personal account. However, it’s not clear what happened to the rest of the money.

https://www.justice.gov/usao-vi/pr/houston-man-arrested-international-money-laundering-conspiracy-stretching-us-virgin

[UPDATE 02.04.21 Bishop was sentenced to 41 months].

Andy Bishop, 45, of Katy, has pleaded guilty to stealing more than $2 million from his employer, Independent Professional Management (IPM), a staffing and asset management company, based in west Houston.

The company started in 1992 and Bishop joined in 1998. According to the company’s website ‘Andy Bishop joined the team, not knowing he would eventually become the Super Star operations guru that everyone relies on to keep things running on a daily basis.’ His title was VP of Resource Management.

As stated in the criminal charges, Bishop was in charge of preparing the ‘Borrowing Base Report’ to Gulf Coast Bank. This was used to fund the operations of the company. In the example in the charge sheet, Bishop stated that IBM had $3,888,237 in accounts receivables, when in fact the company only had $2,822,065 in receivables. That allowed IPM to borrow more money than the company was truly entitled to.

According to the press release from the US Attorney’s Office, Bishop created fake vendor accounts and diverted the ‘excess’ cash to pay these vendors.  Over a span of six years, Bishop stole approximately $2.1 million. These details are not included in the criminal charges filed.

The owners of the company discovered the fraud in August 2019.

Bishop will face sentencing on Jan 5, 2021. At that time, he faces up to 20 years in federal prison and a possible $250,000 maximum fine.

Last week, in another case involving a trusted, long-standing employee, James Camp was sentenced to four years for stealing $10 million over a 19-year period from Lubrizol in Deer Park.

https://www.justice.gov/usao-sdtx/pr/ex-oil-exec-admits-stealing-more-2-million

Robert Andrew Bishop – charges

[Note that the press release issued by the US Attorney’s Office incorrectly refers to the employer as International Professional Management].

Joshua Ikejimba has pleaded guilty to conspiring to commit wire fraud. He was sentenced to two years in prison in the Southern District of New York.

Mr Ikejimba, who had many aliases, was part of a wide-ranging, international business email compromise scheme that ran from 2016 to July 2018. He was indicted in May 2019, along with another Houston man, Chinedu Ironuah and two Atlanta men. Mr Ironuah remains at large, while proceeding continue against the other two.

Mr Ikejimba obtained fraudulent passports in false names. He also registered shell companies and opened fake bank accounts at various banks throughout the US. Companies were tricked by fake emails and fraudulent wiring instructions into sending funds to bank accounts controlled by the syndicate. Mr Ikejimba laundered the funds at various check cashing facilities in Houston.

The defendants obtained approximately $8 million in this way. Mr Ikejimba was personally responsible for laundering $1.25 million in fraud proceeds.

Victims listed in the original indictment included

• Intergovernmental organization in New York ($188,815)
• Foreign-based healthcare company ($41,495)
• Foreign-based manufacturing company ($123,895)

In addition to the 24-month prison term, Mr Ikejimba was sentenced to three years of supervised release. He was further ordered to forfeit $1,250,766.03, and to pay restitution to his victims in the amount of $1,238,748.93.

https://www.justice.gov/usao-sdny/pr/texas-man-sentenced-two-years-prison-participation-multimillion-dollar-business-email

[UPDATE 11-29-21 – Mr. Price pleaded guilty in September 2021 and was sentenced to 110 months in prison.]

Lee Price III, who lives in NW Houston, has been charged with fraudulently obtaining more than $1.6 million in Paycheck Protection Program (PPP) loans. He allegedly spent the money on having a good time, including $233,337.60 on a 2019 Lamborghini Urus.

In case you are thinking that you read about this case last week, no, that was a Florida man who used his PPP funds to buy a $318,000 Lamborghini Huracan.

According to the criminal complaint, Price has a felony conviction for forgery (2010) and for robbery (2010). He is also currently a defendant in Harris County, where he is charged with the felony offense of tampering with a government record.

Price purported to be an executive of Price Enterprise Holdings, Price Logistics Services and 713 Construction LLC. Although these entities exist, they have never filed with the Texas Workforce Commission. That means they have not hired employees or paid unemployment taxes.

PPP applications

Price made six applications for PPP funds. However only two were funded, namely;

• $937,500 by Radius Bank, Boston
• $752,452 by Harvest Small Business Finance in California.

For the loan financed by Harvest, Price filled out the forms using the name of an elderly man who had died a month before. On this application, Price had an unnamed co-conspirator, who received $250,000 of the funds received.

Wine, women and song (…and an office lease)

According to the complaint, the day he received the funds from Radius, Price bought a $14,000 Rolex watch. The day after, he bought the Lamborghini. The following days saw him spent $700 at a liquor store, $2,000 at a strip club and $2,500 at two Houston night clubs. Later Price paid $100,000 as a deposit on a property in north Houston. He also spent $108,000 on a lease of new business office space (!) in Memorial City.

For the funds received from Harvest, the complaint alleges Price bought a 2020 Ford F-350 for $85,000 and leased a luxury apartment in midtown Houston. $85,000 was also withdrawn in cash.

Price is charged with making false statements to a financial institution, wire fraud, bank fraud and engaging in unlawful monetary transactions.

Price becomes the third Houston-area man to be charged with fraud in connection with PPP loans. A Funeral Director was charged in June. A 29-year old man (same age as Price) was charged in July.

https://www.justice.gov/usao-sdtx/pr/houston-entrepreneur-charged-spending-covid-relief-funds-improper-expenses-including