Calif. U.S. Attorney: Two East Bay Insurance Executives and Investment Advisor Charged With Fraud Tied to Insurance Company Collapse

OAKLAND, California, Dec. 20 -- The office of the U.S. Attorney for the Northern District of California issued the following news release:

A federal grand jury indictment was unsealed charging Jasbir S. Thandi, Sandeep Sahota, and Jaspreet Padda with insurance fraud crimes related to the collapse of Global Hawk Risk Retention Group, an insurance company headquartered in Livermore, California, announced United States Attorney Ismail J. Ramsey, FBI Special Agent in Charge Robert K. Tripp, and San Francisco Division Postal Inspector in Charge Rafael Nunez.

According to the indictment, Thandi 67, of El Sobrante, was the president and treasurer of Global Hawk, The indictment alleges that between 2017 and 2019, Thandi, misappropriated over $19 million in Global Hawk funds, including sending over $1 million to an entity domiciled in the British Virgin Islands, and over $7 million to other outside entities controlled by Thandi.

The indictment further alleges that Thandi, Sahota, 47, resident of Concord, and Padda, 40, of Elk Grove, submitted false and fraudulent financial statements to insurance regulators that overstated Global Hawk's assets by tens of millions of dollars and concealed the misappropriations. Sahota was Global hawk's vice president and secretary and Padda was the company's outside investment advisor. Global Hawk's primary business was providing automobile liability insurance coverage for truck drivers and small trucking companies. In May 2020, after regulators discovered the misappropriation and Global Hawk's insolvency, Global Hawk was declared insolvent and was liquidated pursuant to a court order.

The indictment charges Thandi, Sahota, and Padda with conspiracy to commit insurance fraud, in violation of 18 U.S.C. Sec. 371 as well as two counts of insurance fraud (false statements to regulators), in violation of 18 U.S.C. Sec.Sec. 1033(a) and 2. The indictment also charges Thandi with two counts of insurance fraud (misappropriation) in violation of 18 U.S.C. Sec. 1033(b).

The indictment also charges Thandi with two counts of bank fraud, in violation of 18 U.S.C. Sec. 1344. The indictment alleges that in 2016, Thandi obtained a $6.4 million bank loan based on false representations, and in 2017, obtained another $14.75 million bank loan, also based on false representations.

The conspiracy count has a maximum statutory sentence of five years in prison and a fine of $250,000. Each insurance fraud count has a maximum statutory sentence of 10 years in prison (or 15 years if the fraud jeopardized the safety and soundness of an insurer and was a significant cause of such insurer being placed in conservation, rehabilitation, or liquidation by an appropriate court) and a maximum fine of $250,000. Each bank fraud count has a maximum statutory sentence of 30 years in prison and a maximum fine of $1,000,000.

For all counts, the court also may order a term of supervised release, fines or other assessments, restitution, and forfeiture, if appropriate. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. Sec. 3553.

Sahota was arrested yesterday morning and made an initial appearance before the Hon. Alex G. Tse, U.S. Magistrate Judge for the Northern District of California. Padda was arrested in the Eastern District of California.

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Assistant United States Attorneys David Ward and Abraham Fine are prosecuting the case with assistance from Kay Konopaske, Kathleen Turner, and Kevin Costello. The prosecution is a result of an investigation by the FBI and the United States Postal Inspection Service.

Individuals who believe that they may be a victim in this case should contact the United States Attorney's Office for the Northern District of California's victim specialists by email at: [email protected].

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Original text here: https://www.justice.gov/usao-ndca/pr/two-east-bay-insurance-executives-and-investment-advisor-charged-fraud-tied-insurance