KBS Realty Advisors’ former chief auditor has pleaded guilty to embezzlement, admitting he stole about $2.7 million from the company, the U.S. Department of Justice announced on Monday.
From 2012 through 2022, Aggarwal signed off on KBS hiring six vendors — all companies controlled by his family and friends. Aggarwal then used these vendors to submit fake invoices for work never performed and KBS paid them, according to the plea agreement.
“The approved vendors forwarded most of the funds to [the] defendant,” the agreement states.
Under the plea agreement, filed with the U.S. District Court earlier this month, Aggarwal will be required to pay full restitution, about $2.7 million.
He also faces a maximum sentence of 20 years in prison, according to the plea agreement, though the U.S. Attorney’s Office has recommended a lower sentence.
KBS and its affiliates operate seven non-traded REITs, plus other funds. The firm, founded in 1992 by Peter Bren and Charles Schreiber, has focused on investing in office buildings, plus some multifamily properties and land development sites.
Aggarwal, who worked for the Newport Beach-based firm for 14 years, allegedly resigned from the company in January after KBS began looking into some of his invoices, according to the criminal complaint filed in November.
KBS “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,” KBS CEO Marc DeLuca said in a statement in November, adding that Aggarwal’s arrest was made as part of “multiple internal and external investigations.”