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A former KBS Realty Advisors executive was arrested Monday in connection with his alleged role in a decadelong embezzling scheme.
Federal prosecutors say that Varun Aggarwal stole $2.6M from KBS between 2012 and 2022. He worked in the company’s internal auditing department, eventually becoming the director of the department, federal prosecutors said.
"Aggarwal used his knowledge of KBS’s policies and procedures to have his friends and family perform contracting work for his groups at KBS," according to a release from the U.S Attorney's Office.
Federal prosecutors allege that Aggarwal submitted invoices to KBS for work by companies controlled by his family and friends — work that was never performed. When payments came through for these fictitious jobs, the money went to his bank accounts.
“We have been informed that a former Chief Audit Executive has been criminally charged and arrested as part of multiple internal and external investigations,” KBS CEO and Eastern Regional President Marc DeLuca said in a statement to Bisnow. KBS has taken the situation “very seriously” and fully cooperated with the investigations, DeLuca said.
“KBS has proactively reimbursed the affected REITs for any amounts inappropriately charged to them, and for the costs the REITs incurred in the joint audit committees’ investigation, in each case regardless of whether any such amounts are recoverable from either the vendors or the individual,” DeLuca added.
Prosecutors say Aggarwal resigned in January, after the company started to look into the invoices he had submitted.
Aggarwal has been charged with one count of mail fraud and one count of wire fraud.
Newport Beach-based KBS Realty Advisors is in the process of trying to sell off the Union Bank Plaza in Downtown Los Angeles, likely at a loss.
UPDATE, NOV. 14, 6:06 P.M. PT: This story has been updated with a comment from KBS.
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