United States Attorney
Southern District of New York
NOVEMBER 24, 2010 ELLEN DAVIS,
PREET BHARARA, the United States Attorney for the
Southern District of New York, announced that SANJEEV JAYANT
KUMAR SHAH, a former financial services advisor at Smith Barney,
pled guilty today to securities fraud and wire fraud stemming
from his involvement in a scheme to defraud clients of Smith
Barney and Citigroup Inc. of over $3 million. SHAH pled guilty
before U.S. Magistrate Judge THEODORE H. KATZ in Manhattan
federal court.
According to the four-count Information filed today in
Manhattan federal court, and statements made during today’s
guilty plea proceeding:
In or about March 2009, SHAH fabricated and then
emailed documents that purported to be from representatives of a
foreign bank (“Client-2”) authorizing Smith Barney to execute at
least two separate electronic transfers of funds, totaling
approximately $3.25 million from Client-2’s account at Smith
Barney to an account held by another entity (the “Entity”) at
another, foreign bank (the “Offshore Bank”).
SHAH also falsely told the representatives of Client-2
that the transfers were necessary to purchase bonds that he
previously had recommended to Client-2. That same day, and again
on or about the following day, SHAH represented to Client-2 that
he would send statements to Client-2 reflecting the purported
purchase of the bonds. After engineering the fraudulent transfer
of Client 2’s funds, SHAH sought to cover up his scheme by
telling the representatives of Client-2 that a technical error on
Smith Barney’s computer system temporarily prevented the bonds
from appearing in the online account statement. SHAH reiterated
that he had in fact purchased the bonds for Client-2.
* * *
The Information charges SHAH with one count of
securities fraud and three counts of wire fraud. The securities
fraud count carries a maximum sentence of twenty years in prison
and a maximum fine of the greater of $5,000,000 or twice the
gross gain or loss from the offense. Each of the wire fraud
counts carries a maximum sentence of thirty years in prison, and
a maximum fine of the greater of $1,000,000 or twice the gross
gain or loss from the offense. The Information also seeks
forfeiture from SHAH of the property that constitutes or is
derived from proceeds traceable to the commission of the offenses
charged.
SHAH, 35, resides in New York, New York. He is
scheduled to be sentenced on February 24, 2011, by U.S. District
Judge William H. Pauley III.
Mr. BHARARA praised the investigative work of the
Criminal Investigators of the U.S. Attorney’s Office for the
Southern District of New York and thanked them for their
assistance in the case.
This case was brought in coordination with President
BARACK OBAMA’s Financial Fraud Enforcement Task Force, on which
Mr. BHARARA serves as a Co-Chair of the Securities and
Commodities Fraud Working Group. President OBAMA established the
interagency Financial Fraud Enforcement Task Force to wage an
aggressive, coordinated, and proactive effort to investigate and
prosecute financial crimes. The task force includes
representatives from a broad range of federal agencies,
regulatory authorities, inspectors general, and state and local
law enforcement who, working together, bring to bear a powerful
array of criminal and civil enforcement resources. The task
force is working to improve efforts across the federal executive
branch, and with state and local partners, to investigate and
prosecute significant financial crimes, ensure just and effective
punishment for those who perpetrate financial crimes, combat
discrimination in the lending and financial markets, and recover
proceeds for victims of financial crimes.
Assistant U.S. Attorney SEAN S. BUCKLEY is in charge of
the prosecution.
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