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Press Release

Sugar Land business owner imprisoned for nine-year fraud scheme

For Immediate Release
U.S. Attorney's Office, Southern District of Texas

HOUSTON – A 56-year-old business owner has been ordered to federal prison following his conviction of conspiring to commit mail fraud, announced U.S. Attorney Alamdar S. Hamdani.

Sudhakar Kalaga pleaded guilty March 6.

U.S. District Judge U.S. District Judge Lee Rosenthal has now ordered him to serve 24 months in federal prison to be immediately followed by one year of supervised release. He was also ordered to pay restitution of $10,406,219 although the court noted that the restitution had already been paid. At the hearing, the court heard additional testimony from a representative of the victim company that described the losses the company incurred and how it had caused employees at the company to lose their jobs. In handing down the sentence, the court stated that while Kalaga was very active in his community, he had taken an oath when he became a U.S. citizen to defend the Constitution and the laws of the United States and was a coward for going along with the fraud.

At the time of his plea, Kalaga admitted that from 2010 to 2019, he engaged in a bribery and bid rigging fraud scheme to secure construction and maintenance work contracts from a company with a manufacturing facility in Houston.

Kalaga admitted he submitted fake bids from non-existent construction companies to the victim company’s facilities manager. This was designed to make it appear his companies’ bids were the lowest. In return, Kalaga paid the facilities manager millions of dollars in kickbacks. Kalaga failed to disclose he was submitting falsified bids and paying kickbacks from the victim company’s own funds.

The victim company would not have paid Kalaga’s companies’ invoices had it known about the falsified bids or the kickback payments.        

Kalaga was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.

The FBI conducted the investigation. Assistant U.S. Attorney Belinda Beek prosecuted the case.

Updated November 30, 2023

Financial Fraud