Najeeb Khan sentenced to prison for $180 million scam in which he bought luxury cars and planes, while his wife was allowed to keep $1 million at home

An Indiana businessman who defrauded customers to build one of the world’s most spectacular collections of classic cars is left with a lone 2005 GMC Yukon – as he begins an eight-year prison sentence.

Najeeb Khan admitted he was “blinded by greed” after executing a scheme from his payroll processing center in Elkhart, Indiana, to amass his Bentleys, Bugattis and Ferraris.

He also paid for a light aircraft, a yacht, a helicopter, mansions in Arizona and Michigan, and homes in Florida and Montana by defrauding more than 1,700 customers through his company Interlogic Outsourcing Inc. for nearly a decade.

But his wife Nancy will be allowed to keep the couple’s homes and bank accounts worth up to $3 million that were transferred to her before his 2020 bankruptcy under a deal struck with creditors.

“I am humbled with deep regret and remorse to all the victims whose lives were negatively affected by my actions and greed,” Khan said as he was jailed last week after admitting bank fraud and attempted tax evasion.

The scam led to Khan and his wife living a life of luxury, including an extensive car collection. Pictured: his cars before they were auctioned

His wife Nancy will be allowed to keep the couple’s homes and bank accounts worth up to $3 million that were transferred to her before his 2020 bankruptcy under a deal struck with creditors. Pictured: The couple’s $1.1 million Michigan home

The 70-year-old migrated from Pakistan in 1974 and paid his way through college by working in a furniture factory and as a suit salesman at JC Penney before taking a job at a bank in Indiana.

He rose to vice president before founding his payroll processing company in 1988.

But from 2011 to 2019, while growing his payroll processing business in Indiana, he began embezzling funds by writing checks back and forth between accounts he controlled to fraudulently inflate account balances.

Khan subsequently siphoned off approximately $73 million for himself.

Keybank in Cleveland, Ohio lost $122 million and other victims included small businesses, nonprofits, four Catholic dioceses and charities including the Boy Scouts of America.

When the scam collapsed, prosecutors say about 1,700 customers lost out on money Khan’s company had withdrawn for payroll taxes. Some victims had to pay the IRS, pay their employees out of pocket, or take out credit to cover taxes.

Some even had to lay off employees, prosecutors said.

Khan’s car collection was auctioned to repay the fraud, which raised approximately $40 million. Pictured: an American racing car ‘Shaw Special’

A 1953 Fiat 8V Supersonic from Ghia and a 1935 Auburn 851 Supercharged Speedster were two cars that were part of Khan’s collection

“Because I was in a position of power, I thought I was all-powerful,” Khan said in video testimony ahead of his sentencing on Thursday.

The fraud came to light in 2019 when Keybank eventually discovered the $122 million hole in its accounts and had to deploy more than 100 employees to track down the missing money.

Keybank senior vice president Peter Szafran said the theft was “breathtaking” and that several bank employees were fired for letting Khan get away with it.

“It was a crime of pure greed,” Szafran told the South Bend Tribune.

“It was not a crime of need, but of excessive greed on an epic scale.”

But from 2011 to 2019, while growing his payroll processing business in Indiana, he began embezzling funds by writing checks back and forth between accounts he controlled to fraudulently inflate account balances.

Khan’s luxurious lifestyle included private planes, including a Cessna 560XL (pictured in a file photo)

U.S. District Judge Pamela Barker ordered him to pay $121 million in restitution to KeyBank, $27 million to customers and $9.8 million in back taxes while jailing him for 97 months.

She predicted that the money owed to the tax authorities will likely never be repaid, while decrying his “greed and self-righteousness.”

She said he collected classic cars as “toys,” but she credited Khan for his lack of a criminal past and the $65 million he has repaid to victims so far, helped by the $40 million he had raised from the sale of his 240 cars.

Under his 2020 bankruptcy settlement, his wife will keep the $1.1 million Michigan home and $650,000 guest house, several vehicles, a retirement fund and some bank accounts.

Khan will keep his own retirement account, two laptops, clothing, a Glock pistol and his 2005 GMC Yukon as part of the deal.

“This defendant essentially gave himself a $150,000,000 loan, spent money however he wanted on himself and his business, and then defaulted, all without ever getting permission from the banks to give him that loan.” , U.S. Attorney Rebecca C. Lutzko said in announcing the case. sentence.

“These types of financial crimes undermine the well-being of our financial institutions and harm our entire community. This office will closely investigate and prosecute individuals who engage in such conduct to protect and prevent harm to financial institutions locally and nationally.”