Shikha Sehgal, of Shirley, sentenced to 2 years of probation, $10,000 fine in $12 million COVID fraud scheme

A Shirley woman was sentenced Monday to 2 years of probation for helping steal nearly $12 million in pandemic business-relief loans and using some of the money to allow the wife of one co-conspirator to own a portion of a business.

Shikha Sehgal, 46, will serve no prison time because federal prosecutors in Manhattan said she provided valuable information that led to the conviction of her co-conspirators. 

She was ordered to pay a fine of $10,000 plus restitution and forfeiture. The latter amounts will be determined in the future, said U.S. District Judge Analisa Torres.

Sehgal pleaded guilty in December to conspiracy to commit wire fraud. She had faced a maximum sentence of 30 years in prison, according to the office of the U.S. Attorney for the Southern District of New York.

Sehgal is among at least 31 Long Islanders charged with defrauding pandemic-era programs that included Paycheck Protection Program loans and COVID-19 Economic Injury Disaster Loans, a Newsday analysis found.

Together, the defendants are accused of illegally obtaining more than $93 million, according to federal court filings.

Sehgal is among three people who carried out a multimillion-dollar scheme to defraud the PPP in 2020 and 2021, when the coronavirus was at its height, according to a federal indictment.

The scheme’s leader was Sandeep Grover, a tax preparer from Massapequa and prominent member of Long Island’s Indian American community. He allegedly recruited Sehgal, his client, for the scheme, the indictment states.

Grover, 56, was sentenced to 18 months in prison last month and ordered to pay restitution of between $2.2 million and $3.8 million, a $250,000 fine and forfeit assets, including houses in Shirley and upstate Preston Hollow.

Grover’s former employee, Abhijeet Singh, 27, of Queens, also was sentenced last month. He received no prison time and 3 years’ probation.

In the case of Sehgal, she “fully cooperated ... [and] helped in the prosecution of the case,” Jane Y. Chong, an assistant U.S. attorney, said Monday in federal court in Manhattan.

Sehgal worked with Grover between April 2020 and April 2021 to submit false PPP loan applications for up to five companies that she claimed to own outright. The pair sought $714,000 in loans and received $444,500, court filings show.

Three of the companies received a total of $270,200 based on inflated figures for their numbers of employees and payroll sizes. The three had no paid workers in 2019 or 2020, based on Social Security Administration and state Department of Labor records.

Sehgal also used more than $105,000 in PPP and COVID Economic Injury Disaster Loans to buy 33% of the fourth company, Theory of Arts and Sciences, that she didn't already own and to repay a loan from the seller. Sehgal then transferred the 33% stake to Grover’s wife, according to a federal complaint.

Theory received two PPP loans totaling $153,800, the complaint states.

The PPP and COVID EIDL money was supposed to be used to pay employee salaries during the economic lockdown that was imposed in 2020 and 2021 to slow the virus’ spread, according to the complaint.

Before the sentence was announced on Monday, Sehgal addressed the court, saying she trusted Grover and thought she was helping the needy.

“I’m not after money,” Sehgal said,  adding that she runs educational centers for special needs children.

“When the pandemic came and the centers closed, Mr. Grover helped me pay the instructors. He asked me if I wanted to help others ... I never questioned him, but I should have,” she said,  sobbing.

Sehgal’s attorney, Yan Katsnelson, said news of her indictment has led to ostracization by the Indian American community, including her daughter being bullied. Grover continues to receive the community’s support, the lawyer said.

By James T. Madore

james.madore@newsday.comJamesTMadore

James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.