Sept. 22, 2022 By Christian Murray
Two East Elmhurst men who had contracts to maintain housing shelters throughout the 5 boroughs have been busted for allegedly bilking the city out of millions of dollars by filing bogus invoices for work not done.
Liaquat Cheema, 62, and Ali Cheema, 31, ran a construction company out of Corona and allegedly submitted fraudulent invoices between 2014 and 2018 for maintenance work that they did not complete.
The pair allegedly charged the city for work performed by employees who did not exist, as well submitted invoices for materials at inflated prices that they claimed to use. They then, prosecutors say, set up bank accounts with the help of three other men to launder the ill-gotten proceeds.
The pair were arrested Wednesday in East Elmhurst and charged with wire fraud conspiracy, aggravated identity theft, and money laundering conspiracy.
“The defendants entered into public contracts so that they could provide vital maintenance to homeless shelters to aid New York City’s most vulnerable residents; however, instead of honoring these contracts, the defendants allegedly concocted multiple schemes to steal public funds,” said U.S. Attorney Damian Williams for the southern district of New York.
The three men who were allegedly involved in the money laundering scheme were also arrested Wednesday, including Irfan Bajwa, 42, of New Hyde Park, Shouket Chudhary, 54, of East Elmhurst, and Khizar Hayat, 46, of East Elmhurst.
According to the charges, Liaquat Cheema and Ali Cheema operated AFL Construction Co. and entered into contracts with the city—totaling $12 million—to perform general contracting work at homeless shelters, which involved general maintenance, landscaping, roofing and snow removal.
To date, AFL has been paid at least $8 million for work purportedly performed pursuant to these contracts.
Federal prosecutors say the pair used the contracts to fraudulently enrich themselves and steal from the city. They say that the men submitted fraudulent invoices and other documentation in support of requests for payment on the contracts—such as falsely claiming that certain workers had performed work on certain projects and falsely inflating amounts paid by the defendants for materials purportedly used on such projects.
These fraudulent invoices also contained, without authorization, the names of people who had not worked on the projects.
The pair then allegedly acted in concert with Bajwa, Chudhary, and Hayat to establish bank accounts in order to conceal the proceeds of the scheme. They allegedly made multi transactions into their personal and business bank accounts via fraudulent checks as an attempt to cover their tracks.
Liaquat Cheema, Bajwa, Chudhary, and Hayat were also charged for fraudulently obtaining Medicaid benefits by allegedly underreporting their income in order to qualify. The men submitted paperwork on AFL letterhead that misrepresented their income, officials say.
Ali Cheema and Liaquat Cheema both face up to 22 years in prison for their role in the housing shelter scam, with Liaquat Cheema facing an addition 10 years for the alleged Medicaid fraud.
Bajwa, Chudhary, and Hayat have been charged with one count of money laundering conspiracy, which carries a maximum sentence of 20 years in prison; one count of health care/Medicaid fraud conspiracy, which has a maximum sentence of 10 years in prison; and one count of aggravated identity theft, which carries a mandatory sentence of two years in prison.