WASHINGTON, Feb 22: A Pakistani-American business owner known for throwing lavish fund-raisers for political parties was charged with writing $82 million in bad cheques—in just two weeks.
Mr Saquib Khan, known as the Deli King of Staten Island (New York), wrote the worthless cheques last month, according to Brooklyn federal prosecutors. Mr Khan has been released on $400,000 bail.
He has thrown big-dollar fund-raisers for both Republicans and Democrats, according to a report in a Staten Island newspaper.
Mr Khan, who hosted a $1,000-a-plate dinner for Hillary Clinton’s Senate campaign in 2000 and later threw a cash bash for then-Gov George Pataki.
The New York Times revealed in an exclusive report on Thursday that Mr Khan, 51, came from a prominent family in Pakistan. Relatives said he was a favourite nephew of a well-known politician of Khyber Pakhtunkhwa who spoke out against the Taliban and was killed in a suicide attack in late December.
Trained as a doctor, Mr Khan came to the United States in the 1980s, but ended up working with his sister and her husband, who owned some two dozen delis across Staten Island.
He is charged with writing cheques to himself, despite not having enough money in his accounts to cover the massive withdrawals, according to prosecutors. He then tried to cover his tracks by wiring money back into the original accounts, but the suspicious transactions were flagged by officials at the financial institutions.
Prosecutors who put together the recent criminal complaint against Mr Khan said his fraud was an outsized version of a familiar swindle—‘cheque kiting’ —in which the thief takes advantage of the time it takes for banks to clear cheques.
Hurricane Sandy hit Staten Island particularly hard, leaving Mr Khan desperate to recoup business lost during power failures, his lawyer, Sharon L. McCarthy, told the NYT. “All he was trying to do was run his business and pay his employees,” Ms McCarthy said.
“He did not intend to hurt any of these financial institutions.”
The transfers and withdrawals are complicated, but suggested a simple plan: he deposited worthless cheques and withdrew real money — tens of millions worth, according to the criminal complaint. Over two weeks in November, he wrote hundreds of cheques to himself, more than a dozen a day, drawing from accounts at about six banks, the complaint said.
The pattern of precise amounts — $886,841, then $874,532, then $461,232—was an indication of fraud, experts said.
The pace grew increasingly frantic. He deposited $49 million worth of cheques into accounts at Capital One, Bank a mix of legitimate ones from vendors and fraudulent ones written to himself, according to court records and interviews.The bank made those funds available without waiting for the cheques to clear. That turned his fictions into millions, allowing him to transfer $42 million into accounts at other banks, according to a lawsuit that Capital One filed against Mr. Khan’s company.
Mr Khan could not be reached for comment.