Freedom for Dalmia may not last long

FREEDOM could be short lived for Dinesh Dalmia, the key accused of the multi-crore 2001 Calcutta Stock Exchange (CSE) scam, who was released on bail on October 5 after more than seven months of imprisonment.

A day later, the US Government has decided to seek his extradition after he was indicted by a court here on charges of a $19 million fraud for victimizing companies like GE Capital and CitiCapital. Both the cases are, however, not related.

We are seeking his extradition, a spokesman of the office of US Attorney, New Jersey, told The Indian Express. He said, Dalmia along with two others including an Indian American, Ashish Paul, has been indicted by the New Jersey District Court for the $19 million fraud. This could land Dalmia in a US prison for as many as 30 years.

Dalmia, Paul and William Dowling from Ohio have been charged variously in 10 separate counts of money laundering, US Attorney Christopher J. Christie said. The government is seeking to recover the money through forfeiture of Dalmia’s $1.9 million home. Dalmia and Paul are named in numerous charges of the 16-count indictment, which details their conspiracy to defraud lenders GE Capital Finance of Danbury, CitiCapital Technology Finance of Mahwah, and Fifth Third Leasing Company of Cincinnati. Dowling is also charged with conspiring with Dalmia and Paul to launder financial proceeds of their fraud scheme. The indictment was unsealed on September 29 after arrest of Paul at his Bergen County home.

As detailed in the conspiracy and wirefraud charges, Dalmia controlled three New Jersey companiesAllserve, B2B Solutions and Vanguard Info Systems. Having allegedly fled India after the 2001 stock exchange scam, Dalmia is said to have approached the victim lenders between 2003 and 2005 seeking to secure multi-million dollar financing through lease-financing contracts for computer equipment and telephone lists for call centers. These call centers were purported to be engaged in debt collection and telemarketing.

As proof of his need for financing Dalmia presented the lenders fraudulent purchase agreements, invoices and delivery receipts, said the indictment.

Although the lenders inspected the purported high-end equipment before funding the multimillion dollar leases, Dalmia allegedly deceived them by showcasing virtually worthless, outdated equipment he had obtained from used computer dealers. After the lenders paid more than $19 million for the high-end equipment to an Ohio company controlled by Paul, the Paul company then subcontracted its obligation to provide equipment to yet another company controlled by Dalmia, according to the indictment.

Dalmia and Paul duped the lenders by submitting fraudulent invoices to Paul-controlled company, which then routed the money back to Dalmia. Money laundering charges stem principally from the movement of funds through shell companies by Dalmia, Paul and Dowling.