New Jersey Grand Jury Indicts Three For Scamming Brokers Out of $2.6 Min.

A New Jersey state grand jury has indicted three men, accusing them of defrauding five freight brokers out of $2.6 million in an elaborate Internet load board scam.

The indictment accused Fazal Din, Dayton, N.J.; Raiendra Patel, Jersey City, N.J.; and Kulwinder Dhaliwal Singh, Monroe, N.J., of first-degree conspiracy, theft by deception and money-laundering in a "bust out" shipping scam in which the three men allegedly built up a line of credit with the brokers and then used that credit to defraud the brokers.

"We allege that these defendants had their own companies on both sides of fraudulent shipping transactions, with unsuspecting freight brokers caught in the middle." Paula Dow, New Jersey's attorney general, said in a statement. "They allegedly ripped off the brokers, both coming and going, to the tune of $2.6 million."

The indictment also charges the men and two of their wives with failure to file state income tax returns.

As of last week, all three men were fugitives, according to the New Jersey Office of the Attorney General, which is prosecuting the case.

The five brokers who were victims of the fraud were not identified in the indictment, announced on June 30. "We're not ready yet to name the victims," said Peter Aseltine, a spokesman for the attorney general's office.

One of the brokers lost $1.1 million to the fraud, Aseltine said. Authorities were tipped to the scam by the brokers, he added.

Stephen Taylor, director of New Jersey's Division of Criminal Justice, said the fraud scheme was complex and involved more than 1,200 transactions.

"As con artists have become more sophisticated and have exploited opportunities for fraud on the Internet, we have stepped up our efforts to detect and prosecute such white-collar criminals through our Financial and Computer Crimes Bureau," Taylor said in a statement.

The three men allegedly operated their businesses using sham companies that operated as National Freight, National Freight Solutions, Diamond Freight Solutions, Golden Star Express Corp. doing business as Prime Time Freight and PRP Enterprises.

The Attorney General's Office said the scam was unusual because the three men initially gained the confidence of the brokers and built up a line of credit, at first legitimately moving freight using independent owner-operators and large motor carriers.

"The men made some payments in order to sustain the scam," Aseltine said.

The three men were engaged in transactions in which one of their companies - either Prime Time Freight or Diamond Freight Solutions - advertised that they had goods to move and contracted with the freight brokers to ship goods from California to New Jersey.

The brokers would then post the jobs on the Internet, and one of the sham companies, PRP Enterprises, would contact the broker and indicate they could move the freight, but never did - and still got paid.

"Basically, they had the companies on both ends of the transaction, so Prime Time and Diamond Freight never complained," Aseltine said.

Prime Time and Diamond Freight contracted with brokers for a total of 1,217 shipments in 2009 and 2010, authorities said.

However, the brokers were unaware of the connections between the companies involved in the transactions, and the line of credit allowed the victim brokers to pay PRP before the broker was paid hy Prime Time or Diamond Freight, authorities said.

In the end, Prime Time and Diamond Freight allegedly failed to pay $2.6 million owed to the five freight brokers who held contracts with the scam operators that totaled about $4.7 million.

Din, Patel and Singh allegedly laundered their illegal proceeds by moving money through their companies and making payments to relatives and other individual associates.

Din and Patel are U.S. citizens, Aseltine said.

The three men face a sentence up to 30 years in state prison and a $350,000 fine if convicted of the charges.

[Author Affiliation]

By Eric Miller

Staff Reporter