DEVELOPER, PRAVEEN KAILAS, PLED TO THEFT OF GOVERNMENT FUNDS AND CONSPIRACY CHARGES
PRAVEEN KAILAS, age 30, a resident of New Orleans, Louisiana, pleaded guilty to a bill of information charging him with one count of conspiracy to commit theft of government funds and one count of theft of government funds before U.S. District Court Judge Sarah S. Vance, announced U.S. Attorney Dana J. Boente. The indictment filed on June 27, 2013, and the plea filed on August 1, 2013, were unsealed today.
According to the court record, KAILAS’s charges stem from his company, Lago Construction, L.L.C.’s, overbilling its construction monitoring subcontract for the Louisiana Road Home’s Small Rental Property Program (“SRPP”). The Department of Housing and Urban Development (“HUD”) funds the SRPP which provides monetary assistance to property owners to repair their small scale rental properties damaged by Hurricanes Katrina or Rita. In order to receive the grant, a small rental property owner has to agree to make the renovated rental units available to moderate to low-income tenants for a period of years. HUD provided the State of Louisiana Office of Community Development with federal funds to administer the SRPP. The State of Louisiana in turn subcontracted with private entities to oversee the administration of the SRPP, including the renovation of the properties.
Starting on June 6, 2011, Lago Construction, L.L.C., began its subcontract performing construction monitoring of the renovations of SRPP funded properties. KAILAS’s theft of federal funds designated for SRPP administration began from the inception of Lago Construction, L.L.C.’s subcontract when one of the Lago Construction, L.L.C., stakeholders was billed for working on the subcontract 40 hours each week, but did not spend 40 hours each week performing SRPP construction monitoring services or any other administrative services. The theft continued until on or about November 16, 2012, as KAILAS, and others approved timesheets overstating the amount of hours other individuals worked on SRPP related activities.
In court documents associated with his guilty plea, KAILAS admitted that he and other stakeholders of Lago Construction, L.L.C., solicited monitors to work on the construction of a home they owned in New Orleans, Louisiana, and/or to work at other companies owned and operated by them. Hours that these monitors spent on other projects for KAILAS and other stakeholders of Lago Construction, L.L.C., were not deducted from the hours that were billed to the SRPP contract nor were the monitors paid separately for the work they performed on other projects. KAILAS and Lago Construction, L.L.C., were paid from federal dollars for these monitors as if they had spent all the hours they billed each week performing services related to the SRPP.
KAILAS is scheduled to be sentenced on November 13, 2013. He faces up to 5 years imprisonment on the conspiracy count and up to 10 years imprisonment on the theft of government funds count. The amount of restitution will be set by the Court.
The case was investigated by the Federal Bureau of Investigation, Department of Homeland Security, and Department of Housing and Urban Development. The case was prosecuted by Assistant United States Attorney Emily K. Greenfield.
If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims or have knowledge of waste, abuse, or allegations of mismanagement involving disaster relief operations, contact the National Center for Disaster Fraud toll free at: (866) 720-5721. You can also fax information to: (225) 334-4707 or e-mail it to: firstname.lastname@example.org