Minneapolis Woman Indicted for Orchestrating Multimillion-Dollar Accounts Receivable Factoring Scheme, PPP Loan Fraud
MINNEAPOLIS – A federal grand jury returned an indictment against a Minneapolis woman for orchestrating an accounts receivable factoring fraud scheme and a PPP loan fraud scheme, announced U.S. Attorney Andrew M. Luger.
According to court documents, Khemwattie Singh, 52, was the chief executive officer of Global Medical Services, a Minnesota-based healthcare solutions company. Between June and October 2018, Singh and others entered into factoring contracts with MD Capital Solutions, a Florida-based investment company, to purchase the accounts receivable of Global Medical Services and Minnesota International Medicine for more than $2.6 million. Factoring is a form of short-term financing in which a business sells its accounts receivable to a third-party at a discount.
According to court documents, Singh defrauded MD Capital Solutions by failing to pay over the receivables as they were collected and falsely represented to MD Capital Solutions that no funds had been received. Instead, Singh pocketed the money, wiring more than $5 million overseas to bank accounts in Morocco and shell companies she controlled.
According to court documents, in September 2019, MD Capital Solutions sued Global Medical Services in state court in Minnesota and Florida. By the end of 2019, Global Medical Services shut down and no longer had any employees on its payroll. In April 2020, Singh submitted a false and misleading application for Paycheck Protection Program (PPP) funds in the name of Global Medical Services seeking approximately $383,408. Despite the fact that Global Medical Services was not operational, Singh falsely stated on the application that the average monthly payroll was $153,363 and that the company had approximately 40 employees. As a result of Singh’s material falsehoods and omissions, she received approximately $296,800 in PPP funds. Singh transferred $116,600 to her personal bank account and used the funds to pay for personal expenses, including a home loan and credit card payments.
Singh is charged with seven counts of wire fraud. She made her initial appearance in U.S. District Court yesterday before Magistrate Judge Elizabeth Cowan Wright.
This case is the result of an investigation conducted by the FBI and the Minnesota Commerce Fraud Bureau.
Assistant U.S. Attorney Chelsea A. Walcker is prosecuting the case.
An indictment is merely an allegation and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.