An indictment was returned in federal court in Brooklyn yesterday charging Pushpesh Kumar Baid, also known as “PK Jain,” with wire fraud conspiracy and aggravated identity theft relating to a scheme to defraud investors in an international factoring company (the “Company”) of more than $30 million. Baid, the former Business Head of the Company, was previously arrested in January 2021 on a criminal complaint and will be arraigned on the indictment at a later date.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Thomas Fattorusso, Acting Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation (IRS-CI), announced the indictment.
“As alleged, Baid and his co-conspirators actively misled investors about the nature, operation and investment strategy of an international factoring company, which caused more than $30 million in losses,” stated Acting United States Attorney Kasulis. “This Office will vigorously prosecute defendants like Baid who commit fraud as part of a scheme to enrich themselves at their investors’ expense.”
“As alleged, Baid and his co-conspirators used lies and material misrepresentations to defraud an investment firm responsible for managing funds on behalf of dozens of investors. When the scheme ultimately failed, the investment firm faced losses in excess of $30 million. As today’s action should demonstrate, we are committed to bringing to justice those whose greed leads them to commit criminal financial fraud,” stated FBI Assistant Director-in-Charge Sweeney.
“Regardless of how sophisticated the scheme or what it is called, simply put, Baid stole millions of dollars from his clients who put their trust in him,” stated IRS-CI Special Agent-in-Charge Fattorusso. “Criminal investigators of the IRS operate worldwide specializing in tracing the money to uncover elaborate criminal enterprises.”
Factoring involves the sale of an invoice to a third-party for a discount. In a factoring transaction, the seller of an invoice obtains immediate funding from a buyer, and the buyer of an invoice makes a profit when the invoice is paid in full. The Company purported to be in the business of buying invoices.
As set forth in court filings, Baid was the Business Head of the Company, which purported to be involved in factoring. The Company represented itself as an international factoring business run by an executive team experienced in factoring invoices in particular industries and geographic regions. Between approximately April 2017 and October 2019, Baid and others at the Company conspired to defraud an investment firm (the “Investment Firm”), which made investments on behalf of approximately 50 investors. Specifically, Baid and his co-conspirators induced the Investment Firm to invest millions of dollars in the Company through a series of material misrepresentations about the individuals who purportedly operated the Company; the nature of the Company’s business; the relationship between the Company and the entities with which it was purportedly factoring invoices; and the ways in which investor funds would be used. In July 2019, the Investment Firm stopped receiving payments on invoices that it had factored through the Company, and ultimately suffered more than $30 million in losses related to those invoices. In April 2020, the Investment Firm filed for bankruptcy.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys David Gopstein and Alixandra Smith are in charge of the prosecution.
PUSHPESH KUMAR BAID (also known as “PK Jain”)
E.D.N.Y. Docket No. 21-CR-367 (MKB)