Indian-American CEO convicted for paying kickbacks

Sandip Shah and Shailesh Shah are residents of California and were arrested in February this year.

By: Press Trust of India | New York | Published:July 22, 2014 8:58 am

An Indian-American CEO of two publicly-traded companies has been convicted on charges of paying kickbacks in return for purchases of his companies stock.

Shailesh Shah, 48, of California pleaded guilty before US District Judge Richard Stearns to two counts of mail fraud and two counts of wire fraud.

He will be sentenced in October and could face a sentence up to 20 years in prison followed by three years of supervised release and a fine of USD 250,000, the FBI said in a statement.

As President and CEO of two publicly-traded companies, Shah agreed to pay secret inducements to an investment fund representative in exchange for having the firm buy stock in his companies.

The kickbacks were concealed through the use of sham consulting agreements and other fraudulent documents.

Shah, however, did not know that the purported investment fund representative was an undercover FBI agent.

The plea follows a lengthy investigation focusing on preventing fraud in the microcap stock markets.

Microcap companies are small publicly-traded companies whose stock often trades at pennies per share.

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  1. A
    avi
    Jul 23, 2014 at 3:31 am
    Typical Gujarati style of doing business !
    Reply
    1. G
      Girish
      Jul 22, 2014 at 7:23 am
      compare the harsh punishment with multiple scams in Indian stock markets.nobody's been sent to jail for such a long time in India for financial fraudulence.
      Reply
      1. J
        J R
        Jul 22, 2014 at 4:20 am
        if this law and insider trading law is enforced in india..half of our 'role model' industrialists would end up in jail
        Reply