Roseville Man Charged in Scheme to Defraud State of Employment Benefits

A Roseville man finds himself among nine others facing felony charges for defrauding the State of California of unemployment and disability benefits to the tune of more than $5 million.

According to a Department of Justice statement released Tuesday, in a 36-count indictment, a federal grand jury has charged Avtar Kaur Bains, 73, along with nine others with participating in a scheme to defraud the state of unemployment and disability benefits.

This indictment comes on the heels of two others made as long ago as May 2012. According to the indictment, three of the nine defendants were arrested Tuesday in the ongoing investigation into the fraudulent benefits scheme that was based out of Sutter County. The announcement was made by United States Attorney Benjamin B Wagner. The three arrested are Balkar Singh, 50; Harvinder Kaur, 37; and Harjinder Kaur Thandi, 34, all of Yuba City. The three were arraigned before U.S. Magistrate Judge Dale A. Drozd sometime after 2 p.m. Tuesday, according to the release.

In the 36-count indictment unsealed Tuesday, a federal grand jury charged nine defendants. The remaining defendants: Jit Kaur, 62; Daljit Kaur Sangha, 41; Sukhwinder Kaur, 54; Darshan Rani, 44, all of Yuba City; and Mo Pegany, 56, of Ceres. The individuals will appear in court at a later date, according to the release.

This is the third indictment in an ongoing investigation. Six defendants were indicted in May 2012, and six others were indicted in September 2012.

Here is the statement released by the Department of Justice:

According to the first indictment, Mohammad Nawaz Khan, 56; Mohammad Adnan Khan, 31; Iqila Begum Khan, 31, all of Live Oak, and Mohammad Shahbaz Khan 56, of Yuba City, controlled a series of companies that were reported to the Employment Development Department as farm labor contractors. The Khans sold fake paystubs to other people in the community and used the companies they controlled to report false wages for the individuals who purchased those paystubs. The Khans at times instructed the purchasers how the fake paystubs could be used to fraudulently claim unemployment and disability benefits. Over the course of the conspiracy, the defendants reported wages for over 400 separate individuals that resulted in more than 2,000 fraudulent claims for unemployment and disability benefits. The loss in this case is more than $5 million.

"Fraud against the employer-funded Unemployment Insurance program or the employee-funded Disability Insurance program costs all of us and will not be tolerated," said Pam Harris, Director of the California Employment Development Department (EDD). "EDD’s investigators are committed to detecting and deterring fraud to protect the integrity of these vital programs, which are meant to benefit hardworking Californians and businesses."

According to the new indictment, Jit Kaur, Bains, Sangha, Pegany, Singh, Harvinder Kaur, Thandi, Sukhwinder Kaur, and Rani purchased pay stubs that falsely showed they had been paid wages by companies controlled by the Khans. The defendants would then use that pay stub to file for unemployment benefits, disability benefits, or both. According to the indictment, the defendants purchased pay stubs for approximately $250 for every $1,000 in wages. They would use those fraudulent obtained wages to file for unemployment insurance, disability insurance, or both.

If convicted, the defendants face a maximum statutory penalty of 20 years in prison and a $250,000 fine for each count, according to the release.