Weapons developer sentenced to prison for fraud

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A well-known scientist in the field of nanomaterials is going to prison for 52 months for lying to receive more than $10 million in fraudulent loans.

Srikanth Raghunathan, 43, and his wife, Padmashri Sampathkumar, 40, of Irwin, both pleaded guilty in September to making false statements in regard to a bank application.

According to Assistant U.S. Attorney Brendan Conway, the couple used false documents, including doctored invoices, and fake bank statements, to obtain loans and lines of credit from a number of banks.

In all, the fraud cost dozens of banks and businesses more than $10 million.

After a lengthy sentencing hearing, U.S. District Judge David S. Cercone decided that the husband and wife, who ran Nanomat Inc., in North Huntingdon, should be sentenced far below the recommended advisory guideline of 78 to 97 months in prison.

Ms. Sampathkumar was ordered to serve 40 months in prison.

Defense attorneys for both Mr. Raghunathan and his wife requested a reduced sentence, citing both the need to repay restitution and Mr. Raghunathan's importance in his field.

They called a number of witnesses yesterday, including one man who spoke through a recorded interview.

Patrick Sullivan, operations officer for the Institute for Advanced Technology at the University of Texas at Austin, said Mr. Raghunathan is essential.

Mr. Sullivan's research organization is working on the development of electromagnetic weapons -- rail guns -- that would be able to launch projectiles at twice the velocity of traditional weapons.

"Nanomaterials will be the end-all of this technology," Mr. Sullivan said. "We need all the talent we can get working on this program."

Another witness for the defense, Clifford Bedford, a program manager for the Office of Naval Research, said that Mr. Raghunathan was able to supply nanomaterials at a time when there was generally limited access.

Since the criminal charges have been filed in the case, Mr. Bedford said there has been a nearly three-year delay in development because there has been no access to their product.

"Anything that retards that process is essentially detrimental," he said. "The better our weapons are, the more effective our troops are."

Mr. Raghunathan was able to produce a dozen different kinds of nanomaterials, while others could only make one or two.

When asked by Mr. Conway if Mr. Bedford would change his mind about doing business with the couple based on their fraud conviction, the witness replied: "That concern would be overcome by my need for the technology."

Instead of using the money to live a lavish lifestyle, defense attorneys Thomas Ceraso and Mark Rush said their clients only put all of the borrowed money back into their business.

But Mr. Conway characterized it differently. After they lied to obtain a loan from Citizens Bank for more than $1 million and got caught, they went to another institution, First Merit Bank, in Akron, Ohio, for $3 million.

Then, the prosecutor continued, they used that to repay Citizens. When they were involved in a civil action for the money from First Merit, they went to another organization to get a line of credit.

The scheme continued for four years, he said.

After they were sentenced, Judge Cercone ordered that the couple be taken into custody so that there was no opportunity to flee.

Though Mr. Raghunathan is an American citizen, his wife is still an Indian citizen.

The judge considered electronic monitoring but said it would not provide the assurance he'd like.

He cited the lengthy prison terms; the fact that the couple now owes more than $10 million in restitution and that they are originally from a country with which the United States does not have an extradition agreement.

"Who wouldn't flee?" the judge asked.

Paula Reed Ward can be reached at pward@post-gazette.com or 412-263-2620.


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