Cary Man Indicted on 23 Counts of Wire Fraud and Money Laundering in Ponzi Scheme
Tuesday, January 17, 2023
For Immediate Release
U.S. Attorney’s Office, Eastern District of North Carolina
RALEIGH, N.C. – Kumar Arun Neppalli, 56, was arrested today upon the unsealing of a 23-count indictment in connection with an investment fraud scam. Neppalli faces up to twenty years in prison per count and potential fines.
According to the indictment, Neppalli allegedly relied on his good standing within the Indian-American community in Cary, North Carolina to defraud at least 12 victims or sets of victims into giving him funds under the false pretense that he would be investing their money in a legitimate real estate development in the Orange County, North Carolina area. Neppalli allegedly used the funds from these victims to pay back earlier investors who believed that he was returning their original investment and legitimate capital gains. Returning capital to earlier investors by defrauding new investors is commonly known as a “Ponzi” scheme.
“We are committed to protecting the investing public from financial schemes,” said U.S. Attorney Michael Easley. “The U.S. Attorney’s Office is working closely with the FBI to identify, investigate, and pursue those who cheat people out of their hard-earned money.”
As further alleged in the indictment, Neppalli would typically contact the victims telephonically or in person to describe a local real-estate investment opportunity, usually in Orange County. Neppalli allegedly leveraged his employment with the town of Chapel Hill to convince victims that he had insider knowledge of development plans with respect to the purported real estate. The indictment alleges that, Neppalli would then request a specific amount of money within a short timeframe, sometimes the same day, to facilitate closing the transaction. Neppalli would allegedly promise a return of the principal investment plus a profit within a few months and sometimes ask his victims not to discuss the transaction with other members of the community or reference a non-disclosure agreement.
“Our investigation shows Neppalli abused the trust and confidence placed in him by fellow Indian-American community members. He promised to invest their money in property. Instead, Neppalli used the funds to pay back other people he swindled as part of his scheme; now, multiple victims are left without their much-needed savings,” said Michael C. Scherck, FBI Acting Special Agent-in-Charge. “Fraud can have an immediate and direct impact on people and communities, and the FBI remains determined to bring those who commit it to justice.”
Neppalli was indicted on 17 counts of Wire Fraud in violation of 18 U.S.C. § 1943 and 6 counts of Conducting Transactions in Criminally Derived Property in violation of 18 U.S.C. § 1957. Arraignment before United States District Judge Terrence W. Boyle is expected to occur later this year.
Michael Easley, U.S. Attorney for the Eastern District of North Carolina made the announcement after United States Magistrate Judge Robert T. Numbers II presided over Neppalli’s Initial Appearance. The Federal Bureau of Investigation’s Triangle Fraud Taskforce is leading the investigation, and Assistant U.S. Attorney David G. Beraka is prosecuting the case.
Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 5:22-cr-00347-BO-BM.
An indictment is merely an accusation. The defendant is presumed innocent until proven guilty.
Updated January 17, 2023U.S. Department of Justice Press Release
Categories: Anti-Money Laundering Department of Justice (DOJ) Updates Enforcement Actions Fraud Indictments and Arrests Ponzi Scheme Wire Fraud
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