Sugar Land Business Owner Sentenced to 24 Months in Federal Prison for Mail Fraud

Sudhakar Kalaga, a 56-year-old business owner, has been sentenced to federal prison after being convicted of conspiring to commit mail fraud, announced U.S. Attorney Alamdar S. Hamdani.

Kalaga, who pleaded guilty on March 6, was ordered by U.S. District Judge Lee Rosenthal to serve 24 months in federal prison, followed by one year of supervised release. Additionally, he was ordered to pay restitution of $10,406,219, though the court acknowledged that the restitution had already been paid.

During the sentencing hearing, a representative of the victim company provided testimony detailing the losses incurred by the company and the resulting job losses for its employees. The court noted that, despite Kalaga’s active role in the community, he had taken an oath as a U.S. citizen to uphold the Constitution and laws of the United States, and labeled him a “coward” for participating in the fraud.

In his admission at the time of the plea, Kalaga confessed to engaging in a bribery and bid rigging fraud scheme from 2010 to 2019. The scheme aimed to secure construction and maintenance work contracts from a company with a manufacturing facility in Houston.

Kalaga admitted to submitting fake bids from non-existent construction companies to the victim company’s facilities manager, creating the illusion that his companies’ bids were the lowest. In exchange, he paid the facilities manager millions of dollars in kickbacks. Kalaga failed to disclose the falsified bids and kickback payments, which were made using the victim company’s own funds.

Had the victim company known about the falsified bids and kickback payments, it would not have paid Kalaga’s companies’ invoices.

Kalaga has been permitted to remain on bond and will voluntarily surrender to a U.S. Bureau of Prisons facility, the location of which is yet to be determined. The FBI conducted the investigation.