New Jersey Man Sentenced to Two Years for Role in Multi-Million Dollar SBA Loan Fraud Scheme

A New Jersey man has been sentenced to federal prison for his involvement in a conspiracy that fraudulently obtained over $35 million in Small Business Administration (SBA) loans for the purpose of purchasing hotels. The sentence was announced by the U.S. Attorney’s Office for the District of Maryland.

Rajendra G. Parikh, 65, of Monroe, New Jersey, received a two-year prison sentence followed by three years of supervised release. In addition to the prison term, Parikh was ordered to forfeit $6 million and pay restitution totaling $6,010,655.72. He had previously pleaded guilty in 2025 to conspiracy to commit bank fraud. Two other co-conspirators, Mehul Ramesh Khatiwala, also of New Jersey, and Jennifer H. Watkins, of Marlton, New Jersey, also pleaded guilty in 2025 to federal charges related to the scheme.

The scheme, which ran from August 2018 through February 2020, involved a sophisticated hotel-flipping operation. Parikh, who was an owner of KPG Hotel Mgmt. LLC, and Khatiwala, an owner of Delaware Hotel Group LLC and an operator of GMK Consulting LLC, along with Watkins, who coordinated for Delaware Hotel Group and managed Forza Consulting LLC, conspired to defraud financial institutions. These companies, based in Mount Laurel and Marlton, New Jersey, were involved in hotel management and loan brokerage. The fraudulent activities included making material misrepresentations and omissions during the SBA-loan application process. These misrepresentations concerned the identities of sellers, familial relationships between parties involved, and the true nature and amount of equity contributed by the borrowers. The co-conspirators sought loans through the SBA’s Section 7(a) Program, which guarantees a significant portion of these loans and requires borrowers to invest their own funds into the business.

The fraud was facilitated by the creation of shell companies, where co-conspirators acted as straw owners with no genuine ownership interest. Parikh and Khatiwala were identified as the actual beneficial owners of these entities. These straw owners executed purchase contracts and other necessary documents to acquire hotel properties in the names of the shell companies. Subsequently, a separate company, also controlled by the conspirators, would purchase these hotels from the shell companies at significantly inflated prices. To secure the loans for this purchasing company, the conspirators misrepresented the equity injections from investors to the financial institutions, among other false statements and omissions. The lending institutions relied on these deceptions when approving the loans.

Previously, Judge Deborah K. Chasanow sentenced Mehul Khatiwala to seven years in federal prison and Jennifer Watkins to three years. Rebecca Marie Cohn, of Owings Mills, Maryland, who worked as a settlement and title processor for Residential Title & Escrow Company, pleaded guilty to making false statements to financial institutions in connection with real estate settlements and received credit for time served. This prosecution is part of a broader federal initiative aimed at combating fraud.

The U.S. Attorney’s Office for the District of Maryland commended the investigative efforts of the Federal Housing Finance Agency, Office of Inspector General, and the Federal Deposit Insurance Corporation, Office of Inspector General. This case highlights the serious consequences for individuals involved in fraudulent schemes that exploit government-backed loan programs. Residents seeking information on how to report fraud can visit the U.S. Attorney’s Office for the District of Maryland’s website.

Article by Mel Anara, based upon information from the U.S. Attorney’s Office, District of Maryland.

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