Nikesh Patel, CEO of First Farmers Financial LLC, was sentenced to 25 years in federal prison for selling $179 million in completely fabricated USDA Business and Industry guaranteed loan packages to investment firms, forging USDA employee signatures, creating fictitious borrowers and fake USDA loan identification numbers, and attempting to flee to Ecuador before sentencing.

First Farmers Financial LLC — $179 Million Fabricated USDA Loan Guarantee Fraud (2012–2014)

Outcome: Nikesh Patel, CEO of First Farmers Financial LLC in Longwood, Florida, was sentenced on June 6, 2018 to 25 years in federal prison (followed by 3 years supervised release) for wire fraud in connection with selling $179 million in completely fabricated USDA Business and Industry guaranteed loan packages. Co-conspirator Timothy Fisher, First Farmers' president, was sentenced to 10 years. Patel was arrested just before boarding a chartered flight to Ecuador in January 2018 as he attempted to flee sentencing.

Nikesh Patel formed First Farmers Financial LLC with Timothy Fisher, with Patel serving as CEO. Between November 2012 and September 2014, Patel executed one of the largest fabricated government-guaranteed loan frauds in USDA history. The scheme was elegant in its simplicity and catastrophic in its scale: Patel created 26 entirely fictitious USDA Business and Industry (B&I) guaranteed loan packages and sold them to Pennant Management, a Milwaukee-based investment advisor managing client funds.

Every element of each loan package was fabricated. There were no actual borrowers — Patel invented fictitious businesses as borrowers for each loan. There were no USDA guarantees — Patel created fake USDA loan identification numbers and forged the signatures of actual USDA employees on guarantee documents. There were no underlying loans — no money had ever been lent to any borrower. Patel submitted documents falsely representing that First Farmers had made loans to businesses in Florida and Georgia in amounts ranging from $2.5 million to $10 million each, and that these loans were guaranteed by the federal government under the USDA B&I program.

Pennant Management's clients paid $179 million in total for the 26 fabricated loan packages, wiring funds to a Florida bank account over which Patel had sole signatory authority. The fraud was discovered when investors tried to collect on the loan guarantees.

In a separate but related fraud involving a Tennessee-based investment firm, Patel also sold three fabricated loans totaling approximately $20 million using the same scheme, bringing the total fraud to nearly $200 million.

When it became clear he would be convicted and sentenced, Patel attempted to flee the United States. Federal agents arrested him just before he boarded a chartered flight to Ecuador in January 2018. He was subsequently convicted and sentenced to 25 years.

Primary Source: DOJ NDIL — CEO of First Farmers Financial Guilty of $179 Million Fraud