GRAND RAPIDS, MICH. - A federal judge has ordered a Battle Creek motel owner to pay restitution to his former employees.
Mehul Chandubhai Patel, 31, of Battle Creek was ordered to pay $150,500 in restitution to between 15 and 20 former employees, Assistant U.S. Attorney Timothy Verhey said Tuesday.
Patel, also known as Mike, was ordered to pay the restitution as the last portion of his sentence for lying to Labor Department investigators during a probe of his alleged violation of minimum wage laws.
The order for restitution was delayed by U.S. District Judge Paul Maloney until August to determine if Patel and the government could reach an agreement on the amount.
The agreement, reached on Friday, was announced Monday by Acting U.S. Attorney Andrew Birge. It calls for an immediate payment by Patel and no further action by the government to seek back wages from Patel either in criminal or civil court.
Patel was arrested Nov. 5, 2015, following a raid at the Rodeway Inn at 4786 Beckley Road by officers of the Battle Creek Police Department, the Department of Homeland Security, Office of the Inspector General and the Michigan Department of Corrections. Officials also executed search warrants at the Super 8 Motel in Coldwater. Patel owned both motels.
Police also obtained search warrants at banks where Patel had accounts.
Patel was charged in Calhoun County courts with operating a house of prostitution after police alleged sex workers were using the motel and Patel was taking money from them. He also was charged with fraud.
The prostitution charges in state court were eventually dropped, Verhey said, and Patel was charged in federal court with violation of minimum wage laws.
On Feb. 2, he pleaded guilty in U.S. District Court to violating a federal statute that prohibits anyone from concealing a material fact from the federal government when obligated to disclose it, according to Birge.
Birge said Patel admitted that, in 2005, the Department of Labor found that he had underpayed his employees and violated the minimum wage laws. He then signed an agreement promising to repay hotel employees.
He sent the government copies of checks he said showed he had paid the back wages, but the government said their investigation showed he required the employees to return the money to him after they cashed the checks.
Patel was sentenced to two months in jail and fined $10,000 but the determination of restitution to employees, which had been estimated at $250,000 was delayed.
“Putting Patel in jail for cheating his financially distressed employees was important, but so is making sure they are paid what they are owed," Birge said in a statement. "This settlement allows them to be repaid right away, rather than waiting months or years.”
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Contact Trace Christenson at 269-966-0685 or firstname.lastname@example.org.
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