published : 2023-11-04
Michigan Businessman's $180M Bank Fraud Scheme Unveiled: Sentenced to 8 Years
Najeeb Khan, 70, implicated in check-kiting plot
In a stunning turn of events, a Michigan businessman has been sentenced to more than eight years in prison for orchestrating a $180 million check-kiting scheme.
Najeeb Khan, 70, of Edwardsburg, Michigan, admitted in court that he was 'blinded by greed' as he carried out the elaborate scheme, using the ill-gotten gains to fund a luxurious lifestyle and build an enviable classic car collection.
Authorities revealed that Khan, while expanding his payroll processing business in Elkhart, Indiana, executed the fraud over an eight-year period from 2011 to 2019.
His modus operandi involved funnelling numerous checks and wire transfers with insufficient funds through multiple banks, creating a false impression of abundance in his accounts.
In reality, Khan siphoned off around $73 million for his personal use, financing extravagant vacations, acquiring mansions in Arizona and Michigan, and purchasing properties in Florida and Montana.
But the centerpiece of Khan's extravagant lifestyle was his extensive classic car collection, which featured over 250 prized vehicles including vintage Ferraris, Fiats, and Jaguars.
Prosecutors further revealed that Khan employed the fraudulent scheme to inflate his wealth artificially, using the stolen funds to acquire airplanes, boats, a helicopter, and other luxurious assets.
However, Khan's deception eventually collapsed, leaving about 1,700 of his clients in dire financial straits.
These clients, ranging from small and mid-sized businesses to nonprofits and charities, had funds withdrawn from their accounts, destined for payroll taxes that were never paid.
Among the victims were the Boy Scouts of America and four Catholic dioceses, along with numerous companies forced to face the consequences of Khan's deceit.
Some victims were forced to cover the missing funds themselves, paying the IRS or their employees from their own pockets, while others had to lay off employees or take out lines of credit to cope with the financial fallout.
While Khan's attorneys claimed he made efforts to help his victims by selling off his car collection, it was clear that the damage caused far outweighed any restitution provided.
As part of his sentence, Khan has been ordered to pay $121 million in restitution to KeyBank, $27 million to his clients, and $9.8 million in back taxes.
This notable case serves as a stark reminder of the devastating impact that greed can have, not only on individuals but also on the organizations and innocent people who become unintended casualties of such schemes.