Navin Kumar Aggarwal, a former Hong Kong–based K&L Gates corporate partner, has drawn a 12-year prison sentence after pleading guilty to fraud and money laundering charges stemming from his use of client funds to pay off mounting gambling debts in Macau.
While Aggarwal's nearly $1.1 billion fraud—which he carried out over the course of four years—affected 92 potential investors, two clients, and K&L Gates itself, the
SCMP reports most of that sum has been repaid and that the investors and clients involved suffered actual combined losses of roughly $73.7 million.
Hong Kong bankruptcy court records show that Aggarwal resigned from K&L Gates’s partnership on June 11, 2011, around the time the firm learned of his illegal activity.
“[Aggarwal] engaged in massive defalcations and breaches of fiduciary duty involving thefts of many millions of dollars from [K&L Gates’s] client accounts,”
states a bankruptcy judgment
dated July 13, 2012. “Most of the monies so stolen appear to have been used to fund the debtor’s gambling activities at various casinos in Macau.”
According to a statement of Aggarwal’s financial affairs filed with the bankruptcy court, as of last year he had personal liabilities in excess of $28 million against assets totaling some $5.9 million. (Kevin Hon of Hong Kong’s
Gloria Chan & Co
. is listed as counsel to Aggarwal in his bankruptcy proceedings.)
The Am Law Daily reported in August 2011
on K&L Gates’s decision to sue Aggarwal following his arrest on theft and forgery charges. The firm subsequently obtained a nearly $17 million judgment against Aggarwal, although the Hong Kong bankruptcy court’s July 2012 ruling states that K&L Gates “does not appear to have recovered any significant amounts” from its former partner.
helped K&L Gates conduct an internal inquiry into Aggarwal’s conduct, and the Hong Kong firm has been representing its Am Law 100 client in litigation with Melco and others. A K&L Gates spokesman declined to comment about Aggarwal’s sentencing when contacted Tuesday by
The Am Law Daily
Aggarwal joined legacy firm
Preston Gates & Ellis
in 1999 and made partner a year later. Seattle-based Preston Gates
agreed to merge in late 2006
with Pittsburgh-based Kirkpatrick & Lockhart Nicholson Graham to form what is known today as K&L Gates.
K&L Gates’s Hong Kong office—which according to the firm's website currently has 18 lawyers—has gone through some turnover since Aggarwal’s arrest in August 2011.
For his part, Aggarwal has insisted that he alone is to blame for the crimes he committed. In a
letter made public in court documents written by Aggarwal
to David Tang, the managing partner of K&L Gates’s Asia practice, the ex-partner said he was “really sorry about everything” before going on to list the escrow accounts he pilfered from to pay down his gambling losses.
“I know the gravity of the crime committed. I can’t live with this,” wrote Aggarwal. “I don’t know what devil got into me."