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Khemwattie (Kim) Singh, chief executive officer of Global Medical Services, a Minnesota-based healthcare solutions company, and Neeraj Chepuri the company’s chief medical officer, have pleaded guilty to charges relating to their involvement in an accounts receivable factoring fraud scheme.
According to court documents as reported by the U.S. Attorney’s Office for the District of Minnesota, Singh, Chepuri, and others entered into factoring contracts in 2018 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 USD 2.6 million.
From court documents and based on their admissions in court, Singh and Chepuri 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 and Chepuri kept the funds and wired more than USD 5 million abroad.
In her capacity as CEO, Singh was responsible for Global Medical Services complying with US federal tax laws, including the requirement that the business would withhold federal income taxes and Social Security and Medicare (FICA) taxes from employees’ pay and submit the withheld amounts to the Internal Revenue Service. “Beginning in approximately 2018, Singh willfully failed to file quarterly payroll tax returns or pay over the withheld amounts and the employer ’s contribution to FICA”, said the U.S. Attorney’s Office, District of Minnesota in a 5 January 2024 press release.
On 29 December 2023, Singh and Chepuri each pleaded guilty to one count of wire fraud in US District Court. Singh also pleaded guilty to a separate count relating to her payroll tax activities. The plea agreements include restitution for a fraudulent Paycheck Protection Program (PPP) Loan attained by the defendants for Global Medical Services. Singh and Chepuri are scheduled to be sentenced in May 2024.
Sources: U.S. Attorney’s Office, District of Minnesota; GMS