Natarajan R Venkataram, portrayed by The New York Times and other media outlets as a hero for his work in helping identify the remains of the victims of 9/11, has pleaded guilty to the charge of siphoning over $10 million (about Rs 40 crore) allotted by the Federal Emergency Management Agency.
Venkataram, 42, who was director of Management Information Systems at New York City's Office of the Chief Medical Examiner, pleaded guilty to conspiracy, theft and money-laundering charges.
He will be sentenced by Manhattan Federal Judge Robert Patterson on January 30, and faces over 20 years in prison.
The 16 count indictment charged that Venkataram and girlfriend Rosa Abrieu, 41, who was director of records at the OCME, conspired to send millions to fictitious overseas companies they had set up.
Abreu, a Dominican, pleaded guilty to embezzlement, conspiracy and money-laundering charges.
They were arrested December 7, 2005, from their home in Queens. Arresting officers noticed packed suitcases and other indicators that the pair were on the point of flight when they were held.
'I engaged in money laundering by conducting financial transactions ...designed to conceal my fraudulent activities so I could receive the money without being found out,' he told the court.
'It was the right thing to do. He understands what he did was wrong,' Venkataram's attorney Alan Seidler was quoted in the media.
Venkataram, employed at the medical examiner's office for 13 years, was in charge of computer systems, including procuring and supervising outside consultants.
The indictment alleged that between 1999 and 2004, Venkataram steered more than $13 million (about Rs 52 core) in OCME contracts and purchase orders to three companies run by a co-conspirator.
Venkataram allegedly accomplished this by, among other things, advising the co-conspirator how much to bid on OCME contracts, and arranging for the co-conspirator's three companies to submit purportedly independent 'competing' bids.
The indictment said in the vast majority of cases, the co-conspirator's companies on winning the contracts did little or no work, but instead transferred the funds to other companies as directed by Venkataram, in exchange for a fee.
These entities, in turn, funneled the funds into shell companies set up and controlled by Venkataram and Abrieu, the charge sheet said.
After 9/11, to cite one of the examples, they steered a $11.4 million contract to Comprehensive Computer Resources, a company controlled by a close associate of Venkataram.
An OCME employee first blew the whistle on the scam, to Stephan Zander, deputy inspector general for the department of investigation at the NYC department of Health and Mental Hygiene, in 2004.
'The employee, who worked with the defendants on procurement and payment matters, told me that the defendants appeared to have an unusually close personal relationship, and expressed concern that they also had a close relationship with a vendor, Comprehensive Computer Resources,' Zander said in papers filed in court.
It was subsequently established that Venkataram had personally dropped off CCR's invoices, picked up cheques for that company, and requested expedited processing of CCR payments.
The whistleblower identified a few other companies that had relations with CCR. In 2004 and 2005, CCR issued cheques totaling more than $90,000 to Infodata Associates Corporation. When Zander reviewed the bank accounts of this company, he discovered that its president was Gisela Abreu, Rosa Abrieu's aunt.
From 2001 through 2003, CCR, HS Group, and Infotech issued cheques totaling more than $575,000 (about Rs 2.3 crore) to a company called A&D Marketing Corporation, which was presided over by Rosa's stepmother Aracelis Abreu.
Aracelis Abreu testified she had no role in the company, other than to sign cheques as instructed by Rosa. Interestingly, the company listed the same address as Venkataram in Rego Park, Queens.
Another company, Trade A2Z, was paid over $500,000; again, its listed address was Venkataram's home.
On uncovering these details, Zander contacted the person who controlled CCR. This individual, whose name is withheld as he is cooperating with the prosecution, said he had met Venkataram at a training course provided by CCR.
Since CCR was an approved vendor, Venkataram could award contracts to it. The agreement was that Venkataram would arrange other vendors that were not approved for the work, and CCR would collect a management fee.
These other companies, all floated by Venkataram, bid for contracts along with CCR, to create the appearance of competition.
Reviewing the work done by CCR, the New York department of information technology and telecommunications estimated that it could have been done for a fraction of the $11.4 million (about Rs 45.5 crore) that was paid out.
The indictment also charged D V S Raju, former chairman and managing director of the Hyderabad-based Visualsoft Technologies Ltd, with participating in the scheme and receiving approximately $6 million (about Rs 24 crore) of the stolen funds.
