The alleged fraud, in its full scope, was so damaging to Choxi that it supposedly caused the company to go into bankruptcy. Recently, Choxi’s assets were purchased by jClub, a discount e-retailer, in an attempt to revive the site which was once a burgeoning success.
How did it happen?
As in every case of alleged fraud, there are methods to how it is carried out. In the case of Deepak Agarwal and Choxi, the alleged scheme was fairly simple. The marketing firm Techsys would complete marketing work and services for Choxi under an agreement in which fees were to not exceed $125,000 per month.
As executive members of Choxi, the Agarwal family was able to change their customer service provider from Elco Services to Techsys. When it came time for billing, Choxi Chief of Customer Service, Daniel Depina, allegedly sent the invoices from TechSys to a member of the Agarwal family, instead of the company’s finance department. The invoices were then allegedly marked up to a higher rate and then forwarded to the finance department for payment. This allegedly caused Choxi to overpay millions of dollars for services it was provided.
