Three charged with fraud connected to collapse of a commercial vehicle insurance company

Three people have been charged with insurance fraud that is connected to the collapse of a commercial vehicle insurance company in 2020.

On Tuesday, December 19, officials announced the charging of Jasbir S. Thandi, Sandeep Sahota, and Jaspreet Padda with conspiracy to commit insurance fraud as well as two counts of insurance fraud related to the collapse of Global Hawk Risk Retention Group. Thandi is also charged with two count of bank fraud.

Global Hawk was headquartered in Livermore, California, and provided liability insurance coverage for small trucking companies.

Officials say that Thandi, 67, who was president and treasurer of Global Hawk,  misappropriated over $19 million in Global Hawk funds between 2017 and 2019, sending more than $1 million to an entity in the British Virgin Islands and $7 million to other outside entities controlled by Thandi.

The U.S. Attorney’s Office for the Northern District of California further accuses Thandi, Sahota, 47, and Padda, 40, of submitting false documents to regulators that inflated Global Hawk’s assets by tens of millions of dollars and concealed the misappropriations.

In May 2020, after the  misappropriation and Global Hawk’s insolvency were discovered by insurance regulators, the company was shut down and liquidated, per court order.

Additionally, authorities say that Thandi obtained a $6.4 million bank loan in 2016 and another $14.75 million bank loan in 2017, both based on false representations of the company.

If convicted, Thandi, Sahota, and Padda face a maximum statutory sentence of five years in prison and a fine of $250,000 on the conspiracy charge,  a maximum statutory sentence of 10 years in prison (or 15 years if the fraud jeopardized the safety and soundness of an insurer and was a significant cause of such insurer being placed in conservation, rehabilitation, or liquidation by an appropriate court) and a maximum fine of $250,000 on the insurance fraud charge, and a a maximum statutory sentence of 30 years in prison and a maximum fine of $1,000,000 for each count of bank fraud.