Washington: An Indian-origin British national who was a former partner at consulting firm McKinsey & Co has been arrested in New York on allegations of fraud amounting to nearly USD 890,000, federal prosecutors said today.
Navdeep Arora, a former partner in the Chicago office of McKinsey & Company, was arrested on Sunday at JFK International Airport in New York.
Arora, 51, of London, is charged with eight counts of wire fraud in an indictment filed in US District Court in Chicago.
Arora made an initial appearance yesterday in District Court in New York and was ordered detained pending further proceedings, the Department of Justice said.
The indictment, which was returned in August and unsealed yesterday, also charges Matthew Sorensen, a former internal consultant for State Farm Mutual Automobile Insurance Company, with five counts of wire fraud.
Sorensen, 49, of Bloomington, Illinois, is scheduled to appear for arraignment on January 11 in Chicago.
According to the federal charges, Arora oversaw various consulting services provided by McKinsey to State Farm.
The indictment contends that Arora and Sorensen used two companies – “Gabriel Solutions” and “Andy’s BCB” – to defraud their employers out of phony consulting fees.
Sorensen billed McKinsey for the bogus work purportedly performed by the companies, and Arora allocated the fees to the State Farm projects to which he was assigned, according to the indictment.
As a result of the scheme, McKinsey and State Farm paid USD 38,265 for consulting services purportedly performed by “Andy’s BCB”, and USD 452,710 in fees billed by “Gabriel Solutions,” the indictment states.
Sorensen pocketed nearly all of the fees paid to “Andy’s BCB,” and he took approximately USD 370,000 of the amount paid to “Gabriel Solutions”, according to the indictment.
In addition to the phony consulting services, the indictment contends that Arora fraudulently obtained over USD 400,000 from McKinsey, State Farm and other McKinsey clients in the form of travel and expense reimbursements.
Arora claimed that the costs had been incurred for legitimate business purposes, when in reality the expenses pertained to Arora’s personal travel.
The indictment alleges that Arora falsely expensed personal trips to Scottsdale, Napa, Vail, Miami, Las Vegas, New York, London, Prague and Munich, among others.
Arora also obtained reimbursement for personal expenditures he incurred in Chicago while residing there, the indictment states.
The Chicago expenses included hotel, dining and theater costs, according to the indictment, it said.