An Edwardsburg man will serve eight years in federal prison after pleading guilty to bank fraud and attempted tax evasion.
Najeeb Khan, 70, who lives on Eagle Lake, had pleaded guilty to defrauding KeyBank of over $150 million in a long-running check-kiting scheme. He spent the money on a lavish lifestyle, amassing a huge collection of luxury cars, boats, planes, vacation homes and more.
RM Sotheby’s in 2020 auctioned the collection off for $44 million, helping to repay at least some of Khan’s debts.
Khan owned and operated Elkhart-based payroll processing firm Interlogic Outsourcing Inc. In addition to defrauding the bank, Kahn failed to pay clients’ state and federal tax payments from their IOI accounts as required.
Khan ran the scheme from 2014 to 2017. Check-kiting involves the perpetrator continually writing checks back and forth between accounts he controls. This falsely inflates account balances, deceiving banks into honoring checks written with insufficient funds.
He was charged in federal court in the Northern District of Ohio, since KeyBank is based in Cleveland.
In a press release, U.S. Attorney Rebecca Lutzko said Khan, “essentially gave himself a $150 million loan, spent money however he wanted on himself and his business, then defaulted, all without getting the banks’ approval to give him that loan.”
