Orlando businessman Nikesh “Nik” Patel was sentenced to 25 years in prison in a $179 million loan fraud scheme that lasted from 2010 to 2014. While delivering the judgment, Chicago District Judge Charles Kocoras said the scheme perpetrated by Patel was the biggest he’d seen in nearly four decades on the bench.
Federal prosecutors accused Patel of engaging in a new multimillion-dollar loan fraud - an additional $19 million - while he’s been on bonded release. He was originally arrested in September 2014 and had pleaded guilty in December 2016. Patel had persuaded Kocoras to let him remain free on bond because he was trying to recover money for victims of his fraud.
Patel was arrested a second time on January 6 at the Gateway Kissimmee Airport. The FBI has said in court documents that he was trying to flee to Ecuador, where he sought political asylum, and planned to purchase one of the world’s rarest diamonds using $35 million in “dirty money.”
Patel, of Windermere, admitted in a plea agreement with prosecutors that as CEO of the Florida-based First Farmers Financial LLC, he orchestrated the sale of 26 fake loans to Milwaukee investment firm Pennant Management for $179 million and blew the cash on real estate investments and a lavish lifestyle for himself and his family.
The government’s pre-sentencing documents also provided the most detailed accounts yet of how Patel spent other people’s money and the economic damage his fraud did to several banks and other financial institutions that did business with Pennant, which was forced to close. Pennant’s customers included Illinois Metropolitan Investment Fund, which suffered a direct loss of about $50.4 million. The University of Wisconsin Credit Union lost $52.9 million but didn’t close. Harvard Savings Bank closed after a loss of $18 million.
Before he was sentenced, Patel apologized for his behavior, saying he “would not rest” until every penny of what he took had been paid back to his victims. He choked with emotion when he talked about being separated from his daughters.
Prosecutors had recommended a 30-year sentence. Patel’s attorney, Andrew DeVooght, had filed a response to the government’s recommendations, saying 30 years was not appropriate because “such a sentence ignores many important facts,” such as Patel’s guilty plea and the fact that he had a business partner in his main company that was also charged in the fraud.
