Sandeep Grover of Massapequa, Shikha Sehgal of Deer Park charged in alleged $13 million scheme, federal prosecutors say

Federal prosecutors charged two Long Island men Thursday in an alleged fraud scheme that authorities said resulted in the defendants obtaining more than $13 million in government-backed loans designed to help small businesses during the COVID-19 pandemic.

Sandeep Grover, 54, of Massapequa, and Shikha Sehgal, 43, of Deer Park, were each charged in a complaint with one count of major fraud against the United States and one count of conspiracy to commit wire fraud and bank fraud in connection with 100 applications "containing false representations," which were filed to seven financial institutions.

The major fraud charge carries a maximum sentence of 10 years in prison; the conspiracy to commit wire fraud and bank fraud carries a maximum sentence of 30 years in prison, prosecutors said.

The fraudulently obtained funds were from the Paycheck Protection Program, or (“PPP”) loans, a government program designed to aid small businesses during the pandemic, prosecutors said.

Grover, the owner of Excellent Business Services Inc., a tax preparation business based in Seaford, is also charged with aggravated identity theft for allegedly using an employee’s personally identifiable information on a loan application without authorization.

Defense attorneys for Grover and Sehgal could not immediately be reached for comment. The men were scheduled to be arraigned sometime Thursday, prosecutors said. 

"Sandeep Grover allegedly used his tax preparation business to steal millions of dollars from a program created by Congress to assist struggling small businesses during the pandemic," U.S. Attorney for the Southern District of New York Damian Williams said in a statement. "To pull off his scheme, Grover allegedly recruited co-conspirators like Shikha Sehgal, who opened bank accounts for shell companies and lied to banks about those companies’ loan eligibility."

Prosecutors alleged that from at least April 2020 through at least June 2021, Grover submitted the loan applications to the Small Business Administration "on behalf of dozens of his own companies as well as putative client companies on whose behalf Grover created false IRS filings." 

The applications falsely stated that the companies each had multiple employees and spent tens of thousands of dollars in monthly payroll, prosecutors said. But the companies had actually not reported wages to the Social Security Administration during that time period, prosecutors said.

Prosecutors alleged that Grover used the allegedly fraudulently obtained taxpayer funds to purchase property, pay off personal loans, and pay expenses for other companies he controlled.

Grover allegedly "recruited" Sehgal and others "to open bank accounts for companies that did no business, create fake invoices and other supporting documentation, and submit fraudulent applications for numerous PPP loans," prosecutors said. 

"Fraudulent schemes like these defraud not only a program intended to help small businesses weather a global pandemic but also the United States' taxpayers," said FBI Assistant Director-in-Charge Michael Driscoll. "The FBI will continue to ensure that anyone taking advantage of government backed programs are held responsible in the criminal justice system.”

By Nicole Fuller

nicole.fuller@newsday.com@NicoleFuller

Nicole Fuller is Newsday's senior criminal justice reporter. She began working at Newsday in 2012 and previously covered local government.