Two Sutter County women have been sentenced to two years in prison for making false statements to a federal grand jury about their roles in a series of unemployment and disability fraud schemes based in Yuba City.
The charges against 50-year-old Kaur Johal and 47-year-old Jasvir Kaur were part of a series of cases involving the Khan family, which is accused of schemes that defrauded the California Employment Development Department of more than $14 million. To date, 26 people have been convicted of various offenses related to the schemes, according to a U.S. Attorney’s Office news release.
Johal and Kaur were sentenced Friday by U.S. District Court Judge Garland E. Burrell Jr.
Khan family members – including Mohammad Nawaz Khan, Mohammad Adnan Khan, Mohammad Shahbaz Kahn and Mohammad Riaz Kahn – organized the schemes, setting up a series of farm labor contracting businesses that purported to provide labor to harvest crops in Sutter and Yuba counties. The organizers then allegedly sold fraudulent pay stubs to other people, including Johal and Kaur, and reported false wages to the Employment Development Department.
The people who purchased the pay stubs subsequently filed for unemployment or disability benefits with the EDD based on the fictitious wages. Because the benefit amounts the EDD pays are based on the claimant’s prior earnings, participants in the scheme paid the Khans to report high wages to the EDD, the news release said.
In 2014, the defendants were subpoenaed to testify before a federal grand jury in Sacramento that was investigating the fraud schemes. The women were questioned about their wages and falsely stated under oath that they picked peaches for Ray Khan and that they did not commit fraud, according to the news release. Both claimed they had picked peaches for Ray Khan for at least eight hours a day, six days a week, June through September. They also claimed that they had performed other tasks in the orchards for hours every day after picking peaches.
But other people with knowledge of Ray Khan’s real employees testified that he did not employ the defendants. In addition, evidence presented at the trial showed that the women had reported chronic back and knee problems in prior disability claims with the EDD and were not capable of the intensive physical work required to pick peaches, the news release said. Evidence also showed the women had purchased pay stubs from Ray Khan so that he would falsely report inflated wages to the EDD so they could obtain the maximum amount of unemployment benefits.
The women had participated in previous fraud schemes with other Khan family members and each had already claimed more than $30,000 in benefits.
Over the course of this and related conspiracies, the Khans reported wages for more than 400 individuals that resulted in more than 2,000 fraudulent claims for unemployment and disability benefits, the news release said.
The case resulted from an investigation by the U.S. Department of Labor, Office of Inspector General; the FBI; and the Employment Development Department-Criminal Investigations.