British Indian Former McKinsey Partner Sentenced in U.S. for Fraud

Navdeep Arora, a former partner at consulting firm McKinsey and Co. was sentenced in Chicago to a two-year prison sentence for his role in a fraud scheme that bilked State Farm Insurance of about a half-million dollars.

Arora, 53, a British national of Indian origin, led McKinsey’s work for the insurance company while McLean County Board chair Matt Sorensen worked as an internal consultant for State Farm, helping Bloomington, an Indiana-based insurer, decide which outside consultants to use, according to a GLT report.

Prosecutors said that they engaged in a billing scheme for three years using fake consulting companies, Gabriel Solutions and Andy’s BCB, and fake invoices to steal from State Farm and McKinsey. It cost the insurance company almost $500,000, the report said.

“Despite the significance of the fraud, the government submits that defendant should receive some consideration for paying full restitution prior to sentencing. In addition, Arora’s sentence, despite being more culpable, should be reasonably consistent with the sentence imposed on Sorensen, which was one year and one day imprisonment,” prosecutors said in their pre-sentencing filing, the report added. Arora had already paid $336,862 toward his restitution in the case and intended to allocate his $250,000 posted as his secured bond towards restitution, it said.

Arora and Sorensen “concocted a fraudulent scheme to benefit themselves during their employment,” assistant US attorney Sunil Harjani said during the sentencing. “The defendants’ actions have caused both companies to undertake time and expense uncovering this fraud, destroyed a longstanding relationship between these two companies, and caused reputational harm.”

Arora was arrested in January 2016. He was named in an indictment filed in federal court in Chicago along with a former internal State Farm consultant, Matthew Sorensen, who the indictment on March 14 said participated in the scheme. According to the indictment, quoted by Reuters, Arora was charging McKinsey and State Farm for expenses to reward Sorensen and an unnamed co-schemer for helping McKinsey get the State Farm consulting work since 2004.

Prosecutors said that Arora charged State Farm for business expenses whereas he actually spent the amount taking Sorensen on two personal vacations — to Napa, Calif., and New York. The costs included flights, hotels, meals, car services and other items, the report said.

In 2016, McKinsey had said that they discovered the situation in 2011, notified the client, “terminated the employee involved” and cooperated with the authorities.