Irvine man sentenced to 33 months in prison for embezzling from Newport Beach firm

An Irvine man was sentenced last week for embezzling more than $2.7 million from his Newport Beach employer by submitting fake invoices, according to federal prosecutors.

Varun Aggarwal, 42, faces 33 months in federal prison after pleading guilty in August last year to one count of wire fraud. As part of his sentence, U.S. District Judge Cormac Carney also required Aggarwal to pay $2,729,718 in restitution.

Between 2008 and 2022, Aggarwal was an internal auditor at KBS Realty Advisors and was the department director. As early as 2012, Aggarwal, who was familiar with how the company paid its vendors, had his friends and family acting as vendors to do contracting work for the company, prosecutors said.

After several companies were approved, Aggarwal then submitted false invoices for consulting services, or for work at inflated prices. Those payments would then be funneled to his own bank accounts without Aggarwal informing the vendors that the invoices and subsequent payments were for his own benefit. Aggarwal received more than $2.7 million from the scheme and resigned in January 2022 when the invoices were being investigated, according to court documents.

“[Aggarwal] was not driven to commit his crimes by need, desperation, or the inability to legitimately earn a living,” prosecutors said in a sentencing memorandum issued February. “Despite the advantages defendant enjoyed — including a first-rate education and a well-compensated professional career — [Aggarwal] chose to commit the underlying criminal conduct causing great losses and abusing his position of trust over a lengthy period of time.”

At his sentencing, Aggarwal said he had a “heavy heart for the harm I caused,” felt deep shame and had no excuse for what he did, City News Service reported.

Through his attorney on Monday, Aggarwal said he had been struggling with a severe gambling and alcohol addiction for about a decade until he resigned from KBS Realty Advisors. He later joined Alcoholics Anonymous and Gamblers Anonymous. He said his family did not speak about mental health or the dangers of addiction and that their expectation was for him to recover independently.

His attorney, Joseph Benincasa, said Monday he felt Aggarwal had what could only be described as a “profound life-changing experience” and that he has seen a change in Aggarwal that he has not seen in many clients in the time that he’s been an attorney. He said his team was “disappointed” in the sentence.

Benincasa asked for probation, noting that Aggarwal had disabled family members that he cared for and said Aggarwal attempted to pay back the money prior to finding out that there was a criminal investigation.

“We were hoping he could get probation because he’s doing good work and trying to repay the money that he took, but the court saw it differently because of the total amount of money,” said Benincasa.

City News Service reported that Assistant U.S. Attorney Brett Sagel recommended 27 months in prison because Aggarwal paid taxes on the money he took and cooperated after his arrest in November 2022 and did not contest the forfeiture of assets to pay back what had been stolen.