Sadruddin Brothers Set To Plead Guilty In Fraud Involving Promised Bledsoe County Textile Plant

Friday, November 8, 2019

Two brothers who in 2017 pledged to build a textile plant in economically distressed Bledsoe County that would provide 1,000 jobs are set to plead guilty in Chattanooga Federal Court on Tuesday morning.

Karim Sadruddin and Rahim Sadruddin are to plead guilty to two counts of wire fraud and one count of money laundering.

Governor Bill Haslam had been among those attending the announcement at Pikeville by the Sadruddins. The plant never opened.

Prosecutor Steve Neff said the brothers used much of the proceeds from a $3 million federal grant and a $230,000 grant from TVA for other projects, including buying tarps that were to go to hurricane victims.

Authorities said the pleas"derive from an Oct. 3, 2017 email sent by Karim Sadruddin to Rahim Sadruddin and another in the Eastern District of Tennessee and elsewhere, a fraudulent wire transfer record and a fraudulent invoice valued at approximately $1.4 million purporting to reflect work that had been done on the building and a record reflecting the cost of the purchase of the building valued at $850,000.

"This email resulted in a disbursement of funds, on or about Nov. 9, 2017, via checks totaling $2,256,900 from the IDB to Karim Sadruddin, which he later deposited into TCA's Regions Bank account in Suwanee, Georgia and which he and Rahim Sadruddin later used to purchase tarps in the continuation of the scheme to defraud FEMA. 

"The facts from the Information that support Counts Two and Three of the Information to which the defendant is pleading guilty derive from a June 13, 2018, email from Rahim Sadruddin to a representative of TVA, in the Eastern District of Tennessee, with an attached TVA Performance Grant Agreement, signed by Karim Sadruddin, which falsely represented that prior to April 1, 2018, the defendants had already invested $17 million of their total $27 million investment in the Pikeville manufacturing facility.

"On the same day, Rahim Sadruddin sent to a representative of TVA, in the Eastern District of Tennessee, a second email with an attached Commercial Operation Date Certification, signed by Karim Sadruddin, which falsely certified that TCA's Pikeville facility had achieved commercial operation on March 1, 2018.

"These two emails caused TVA to electronically transfer $230,000 in grant proceeds on July 2, 2018, from a TVA bank account located in the Eastern District of Tennessee, to a TCA account at Regions Bank controlled by the defendants and located in the State of Georgia.

"In sum, Karim and Rahim Sadruddin conspired and agreed to participate in a scheme, and did intentionally participate in a scheme to defraud by knowingly making various fraudulent representations via wire ( emails and other wire-related representations) to FEMA, TVA, and the state of Tennessee. This resulted in several financial transactions with a value greater than $10,000 taking place with financial institutions that engage in interstate commerce.

"Karim and Rahim Sadruddin knew they were using money that came from a specified unlawful activity, and the scheme resulted in a collective loss to the victim entities of between $3.5 million and $9.5 million." 


Latest Hamilton County Arrest Report

PHOTOS: Protest On The Walnut Street Bridge

Georgia Has 20 More Coronavirus Deaths, 468 More Cases; Whitfield Has 20 New Cases


Here is the latest Hamilton County arrest report: APPLEBY, SEAN S 5282 KELLOGG CREEK TRL OOLTEWAH, 37363 Age at Arrest: 24 years old Arresting Agency: Chattanooga LEFT OF CENTER VIOLATION ... (click for more)

Georgia state health officials reported on Saturday there have been 1,984 people in the state who have died from the coronavirus - 11 more since Friday. The confirmed cases are now at 46,331 ... (click for more)



Breaking News

Latest Hamilton County Arrest Report

Here is the latest Hamilton County arrest report: APPLEBY, SEAN S 5282 KELLOGG CREEK TRL OOLTEWAH, 37363 Age at Arrest: 24 years old Arresting Agency: Chattanooga LEFT OF CENTER VIOLATION STOP SIGN VIOLATION DRIVING UNDER THE INFLUENCE --- ATWELL, SARAH 630 SHORT HOLLOW RD SOUTH PITTSBURG, 37380 Age at Arrest: 19 years old Arresting Agency: East Ridge TAMPERING ... (click for more)

PHOTOS: Protest On The Walnut Street Bridge

Opinion

The Court Of Public Opinion Has Ruled

Since the court of public opinion has already judged the officer in Minneapolis, the city should save money and not even have a trial. Let a volunteer, one of these tough guys who run around blindly shooting at people and setting fires, let that guy execute him. With all due respect to our police chief and I mean that sincerely, I disagree with your view. Chief, you should know ... (click for more)

Roy Exum: These Riots Are Surreal

On Monday, when an unarmed black man was killed by a white policeman in Minneapolis, there were 28 others, predominately black, shot within the city limits of Chicago on the very same day. The “Bloody Monday” came after 50 others in Chicago were shot (10 fatally) during the Memorial Day weekend – that’s 78 human beings in just four days – and since “Bloody Monday” through 6 o’clock ... (click for more)

Sports

Ray Deering, Popular Baylor School Administrator And Sports Columnist, Dies

Ray Deering, a beloved Baylor School administrator and sports enthusiast who wrote a popular sports column in the Chattanooga Times Free Press, has died. A lifelong resident of Chattanooga, Mr. Deering was a 1961 graduate of Chattanooga High School and received his Bachelor of Science degree from the University of Chattanooga in 1965. At UC he served as the sports editor of ... (click for more)

Trio Of Moc Runners Honored As CoSIDA Academic All-Americans

Nathan Watson, Jonathan Boyd and Abbey Bateman were named to the 2020 CoSIDA Academic All-District First Team, as voted on by sports information directors around the country, for their excellence in the classroom and competition. The 2020 Academic All-District® Women's Track & Field / Cross Country Team, selected by CoSIDA, recognizes the nation's top student-athletes ... (click for more)