Newark Man Pleads Guilty to Multi-Million Dollar Scam Targeting Telephone and Insurance Companies

Parag Bhavsar, 42, of Newark, has pleaded guilty to conspiracy charges relating to a scheme that defrauded telephone providers and insurance companies of millions of dollars through fraudulent claims for replacement cellular devices, according to U.S. Attorney Philip R. Sellinger.

Who, What, When, Where, Why, and How:

Who: Parag Bhavsar, a 42-year-old resident of Newark, New Jersey.

What: Bhavsar pleaded guilty to one count of conspiracy to commit mail fraud and one count of conspiracy to commit interstate transfer of stolen property.

When: The fraudulent activities took place between June 2013 and June 2019. Sentencing is scheduled for January 3, 2024.

Where: The scam operated across the United States, including in New Jersey, using a network of mailboxes and storage units.

Why: Bhavsar and his conspirators aimed to deceive phone providers and insurance companies into shipping replacement devices, which were later sold outside the United States.

How: By exploiting stolen or fake identities, Bhavsar filed false claims of lost, stolen, or damaged cellular phones and other devices, which were shipped to mailboxes and storage units before being resold.

Legal Consequences:

The charge of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine of $250,000 or twice the gain or loss from the offense, whichever is greater. Likewise, the charge of conspiracy to commit interstate transfer of stolen property has a maximum penalty of five years in prison and a fine of $250,000 or twice the gain or loss. As part of the plea agreement, Bhavsar has consented to the entry of a forfeiture money judgment of $10.67 million.

Investigative Credit:

The successful indictment was the result of a collaborative investigation led by several agencies, including the FBI, U.S. Postal Inspection Service, Homeland Security Investigations Newark, U.S. Customs and Border Protection, and the U.S. Department of State’s Diplomatic Security Service.

The case is being prosecuted by Assistant U.S. Attorney Rachelle M. Navarro of the U.S. Attorney’s Office’s Criminal Division in Newark.

It is important to note that Bhavsar is pleading guilty and sentencing is yet to be finalized. Until then, the accused is presumed innocent.

The case underscores the complexity and scale of identity theft and fraud schemes that can operate for years before detection. It serves as a reminder to both individuals and corporations about the necessity of robust security measures to prevent such fraud.