A Lone Tree man who took in more than $17 million from a government small business program before illegally siphoning off about $4 million, pleaded guilty to fraud charges.
The U.S. Department of Justice said Hemal Ramesh Jhaveri, 52, used the company he founded and owned, SofTec Solutions, Inc. of Englewood, to participate in government programs between 2001 and 2010.
Under the rules of the programs Jhaveri’s net worth was to remain under $750,000 and his withdrawals from the company were not to exceed $300,000 in any fiscal year.
In order to circumvent those limits, Jhaveri, with the assistance of others, officials said, diverted money from SofTec Solutions to bank accounts that he controlled and to other places for his personal use and benefit.
Prosecutors said the diversions occurred in the years 2006 through 2009, with much of the diverted money moved to bank accounts in California, India, Singapore, and Hong Kong.
In addition, officials said, Jhaveri diverted over $500,000 from SofTec Solutions and used it as part of the purchase price of his $3,000,000 residence in Lone Tree.
He also arranged for the company to pay the IRS $177,240 to satisfy his personal tax bill. In 2008 and 2009, Jhaveri caused SofTec Solutions to transfer a total of $984,194 to pay expenses related to a restaurant in which he had an interest.
Jhaveri also funneled $45,000 from SofTec Solutions to an account of a dormant company and used that money to make his alimony payments.
Jhaveri willfully failed to report $3,349,111 of the diverted money as income on his 2006-09 returns and, as a result, he caused a tax loss of $1,171,179.
Jhaveri pled guilty to one count of conspiracy to defraud the United States, which carries a penalty of not more than five years in federal prison, and a fine of up to $250,000.
