Real Estate Ponzi: Kumar Neppalli Of NC Arrested For Duping Fellow Indian Americans
India-West News Desk
CARY, NC – Kumar Arun Neppalli, has been indicted in a 23-count wire fraud, money laundering, and investment fraud. He faces up to twenty years in prison per count and potential fines.
Neppalli,56, relied on his good standing within the Indian American community in Cary, where he lived, to defraud at least 12 victims or sets of victims into giving him funds under the false pretense that he would be investing their money in a legitimate real estate development in the Orange County, North Carolina area, the Department of Justice said.
Neppalli allegedly used the funds from these victims to pay back earlier investors who believed that he was returning their original investment and legitimate capital gains. Returning capital to earlier investors by defrauding new investors is commonly known as a “Ponzi” scheme.
“We are committed to protecting the investing public from financial schemes,” said U.S. Attorney Michael Easley. “The U.S. Attorney’s Office is working closely with the FBI to identify, investigate, and pursue those who cheat people out of their hard-earned money.”
As further alleged in the indictment, Neppalli would typically contact the victims telephonically or in-person to describe a local real estate investment opportunity, usually in Orange County. Neppalli allegedly leveraged his employment with the town of Chapel Hill to convince victims that he had insider knowledge of development plans with respect to the purported real estate.
The indictment says that Neppalli would then request a specific amount of money within a short timeframe, sometimes the same day, to facilitate closing the transaction. He would promise a return of the principal investment plus a profit within a few months and sometimes ask his victims not to discuss the transaction with other members of the community or reference a non-disclosure agreement.