June 25, 2024

A previous employee of Town of Chapel Hill, Kumar Neppalli, has been sentenced to serve 44 months in prison and ordered to repay almost $1 million to his victims after his conviction on multiple wire fraud charges.

According to a press release from the U.S. Department of Justice, Neppalli, 57, who was employed as a transport engineer for the town, was arrested in January 2023 on 17 wire fraud counts and six money laundering charges. He subsequently pleaded guilty to the former charges.

No irregularities were found in Neppalli’s town-related activities, according to the town authorities. He allegedly used his positional influence to convince investors that he had exclusive information on Orange County real estate opportunities.

The financial investments requested by Neppalli were said to have specific, short deadline periods. Some victims were repaid after several months, with Neppalli describing these payments as investment profits when in reality, they were funds derived from other victims.

Condemning Neppalli’s actions, U.S. Attorney Michael Easley for the Eastern District of North Carolina, termed him a conman, adding that this was a clear cut case of a Ponzi scheme. The man deceived investors with fraudulent promises of overstated profits within a short period while using his ethnic and religious affiliations to seem more credible.

The Federal Bureau of Investigation Special Agent in Charge in North Carolina, Robert DeWitt, also echoed Easley, expressing hope that Neppalli’s prison sentence will bring some form of justice to his victims, many of whom lost their entire life savings in the scam.

You can access the full press release on Neppalli’s sentencing from the U.S. Department of Justice here.

Frequently Asked Questions

What is a Ponzi Scheme?

A Ponzi scheme is a fraudulent investing scam promising high rates of return with little risk to investors. The scheme leads victims to believe profits are coming from genuine business activity, when in reality they are just funds derived from new victims.

How can one avoid falling victim to Ponzi Schemes?

Some measures to avoid falling victim to Ponzi schemes include thoroughly researching and understanding investments before making a commitment, staying vigilant for red flags like guaranteed returns or complex strategies, and being wary of pressure to invest quickly.

What happens to the perpetrators of a Ponzi Scheme?

Perpetrators of a Ponzi scheme face severe legal penalties if convicted. These may include significant fines, restitution orders to repay victims, and often, substantial prison sentences as seen in Neppalli’s case.