San Diego Indian Couple Nimesh Shah and Nidhi Shah Plead Guilty to Financial Fraud and Making False Statements
November 13, 2019 - San Diego Indian Couple Nimesh Shah (36), owner of Blue Star Learning Technical Training School, and his wife Nidhi Shah (34) pleaded guilty today to defrauding the Department of Veterans Affairs (VA) out of more than $29 million in Post-9/11 G.I. Bill benefits and making false statements respectively.
While Nimesh Shah, owner of San Diego based Blue Star Learning Technical Training School has been charged with one count of wire fraud, his wife Nidhi Shah was indicted on one count of making false statements.
Case BackgroundThe U.S. Dept. of Veterans Affairs offers assistance for education-related expenses such as tuition and housing to veterans and other eligible individuals under the The Post-9/11 G.I. Bill.
In order to receive assistance, the veteran has to first enroll in a training school as the VA pays tuition and fees directly to the school.
Besides the tuition and fees, VA additionally provides a monthly housing allowance directly to the veteral if he/she is enrolled in a training school on more than a half-a-time basis.
And to receive funds from Dept. of Veterans Affairs under the Post 9/11 G.I. Bill, training schools like Blue Star Learning are required to follow 85/15 rule i.e., 15% non-veteran students for each course.
Further, technical training schools like Blue Star Learning are forbidden to engage in any erroneous or misleading advertising according to the Post-9/11 G.I. Bill.
According to Nimesh Shah’s plea agreement:
...from March 2016 to June 2019, he devised a scheme to defraud the VA with regards to Post 9/11 G.I. Bill benefits. Specifically, although Shah knew that close to 100 percent of students at Blue Star Learning were veterans receiving VA educational assistance, Shah repeatedly misrepresented to the California State Approving Agency for Veterans Education (CSAAVE) and the VA that Blue Star Learning was in compliance with the 85/15 Rule. In order to deceive CSAAVE and the VA, Shah created, and directed at least three other employees at Blue Star Learning to create, fake student files for the purported non-veterans in each program. Shah additionally emailed the VA 48 fraudulent enrollment agreements for fictitious people he represented were non-veteran students at Blue Star Learning, complete with fraudulent dates of birth, social security numbers, addresses, phone numbers and emails for each fraudulent non-veteran student.
...Blue Star Learning additionally had to provide vocational attainment data to CSAAVE on a yearly basis, as part of a required yearly approval process.
....Shah knew that the vast majority of Blue Star Learning graduates did not obtain jobs in the fields in which they were purportedly receiving training, and that the employment statistics on Blue Star Learning’s website were fraudulent.
...Shah nonetheless submitted fraudulent spreadsheets to CSAAVE claiming that all of the Blue Star Learning students listed were employed in the informational technology field. On these spreadsheets, Shah provided fraudulent phone numbers, email addresses, employers, and employer contact information for each student. Shah hired individuals to create the fraudulent email addresses for the Blue Star Learning students, and directed these individuals to answer emails received at the fraudulent email addresses pretending to be satisfied Blue Star Learning graduates working in the information technology field. Shah additionally created 30 fictitious companies that he listed as the employers on the fraudulent spreadsheets, and hired individuals to create fraudulent email addresses and domain names for each fictitious company. Shah directed a Blue Star Learning employee to purchase 30 cellular telephones, one for each fictitious employer, and had employees of Blue Star Learning create voicemails on each cellular telephone so that it would appear that the fraudulent businesses were legitimate if CSAAVE called to check.
As a result of Shah’s fraud, the VA issued over $11 million in tuition payments to Blue Star Learning, and over $18 million in housing allowances and stipends. In total, the VA lost $29,350,999.
Potential PenaltyOn the count of wire fraud under Title 18, U.S.C., Section 1343, Nimesh Shah faces a maximum penalty of twenty years’ imprisonment and $250,000 fine.
The count of making false statement under Title 18 U.S.C., Section 1001 against Nidhi Shah carries a maximum penalty of five years’ imprisonment and $250,000 fine.