Hemal Ramesh Jhaveri, Conspiracy, Colorado 2024

Lone Tree Businessman Sentenced for Conspiracy

DENVER, CO – March 2024

Hemal Ramesh Jhaveri, the owner and former CEO of SofTec Solutions Inc. of Englewood, Colorado, was sentenced in federal court in Denver to six months in prison.

Jhaveri pleaded guilty earlier this year to conspiring to commit the crimes of making false statements to influence the Small Business Administration (SBA) and of filing false federal income tax returns.

The conspiracy began in 2006 and continued to 2013.

Jhaveri, age 52, is a resident of Lone Tree, Colorado.

Chief Judge Marcia Krieger of the U.S. District Court, who imposed the sentence, ordered Jhaveri to serve a two-year term of supervised release following his release from incarceration, perform one thousand hours of community service, and pay a fine of $250,000.

Prior to the sentencing hearing, Jhaveri paid restitution to the Internal Revenue Service in the amount of $1,171,179.

A Plea Agreement and other documents that were filed in the case described the factual basis for Jhaveri’s guilty plea:

The SBA’s 8(a) Business Development Program is available to small businesses that are owned by socially and economically disadvantaged individuals.

A business admitted to the program receives various benefits, including sole-source, or non-competitive, government contracts.

The SBA admitted SofTec Solutions to the program in 2001, and the company thereafter received sole-source contracts under which it provided clerical and administrative support and other services to federal departments and agencies.

Following the start of the conspiracy in 2006, those departments and agencies paid SofTec Solutions more than seventeen million dollars pursuant to the contracts.

The SBA required SofTec Solutions to annually provide Jhaveri’s financial statements and other information, which the agency used to determine whether the company met the requirements to remain in the program.

One requirement was that Jhaveri’s net worth remain under $750,000.

Another was that his withdrawals from his company not exceed $300,000 in any fiscal year.

In order to circumvent those rules, Jhaveri, with the assistance of his chief financial officer and others, diverted money from SofTec Solutions to bank accounts that Jhaveri controlled, to bank accounts of associates, and to other places for his personal use and benefit.

The government took the position in court that the amount diverted was $4,494,305.79.

Some of the diverted funds were transferred to accounts in California, India, Hong Kong, and Singapore.

At Jhaveri’s direction, SofTec Solutions’ CFO misrepresented in the company’s accounting records that those transfers were payments of business expenses, making it appear that those to whom the money was sent had provided services.

The money in fact went to accounts controlled by Jhaveri’s associates, who deducted commissions and then, at his direction, passed on the remaining funds to his bank accounts.

Jhaveri created false invoices and agreements to make it appear that there was support for the recording of the transfers as expenses.

Much of the other money diverted from SofTec Solutions was used for expenses related to a restaurant in Lone Tree in which Jhaveri had an interest.

In January 2007, Jhaveri used $300,000, which was transferred from SofTec Solutions to his personal bank account, to make a partial payment for the purchase of the property where the restaurant was located.

In 2008 and 2009, another $984,194.40 moved from SofTec Solutions to accounts of Jhaveri and related entities and used to pay restaurant expenses.

And, in late 2009, after the restaurant had closed, $116,000 was moved out of SofTec Solutions to make mortgage payments and pay other expenses related to the restaurant property.

The remaining diverted funds included $40,000, which was wire transferred in March 2008 from SofTec Solutions to an account in Jhaveri’s name at ABN AMRO Bank in India.

One year later, Jhaveri diverted $558,590.39 from his company and used it to purchase a property in California.

MORE FEDERAL CRIME NEWS

White Collar Crime

Quintero Upegui, Money Laundering, Florida 1999

Jan 15, 1999

White Collar Crime

Angel Joaquin Daniel Flores, Wire Fraud, South Carolina 2022

Jan 15, 2022

White Collar Crime

Donald Frank Letellier, Money Laundering, Nevada 2002

Jan 15, 2002

White Collar Crime

Francisco Miramontes, Wire Fraud, Nevada 2001

Jan 15, 2001