Ex-Chapel Hill Staffer Sentenced Over Ponzi Scheme, Ordered to Pay Nearly $1 Million

After being arrested on more than a dozen wire fraud charges one year ago, a former Town of Chapel Hill employee was sentenced to prison time this week.

A release from the U.S. Department of Justice on Wednesday said a federal district court judge sentenced 57-year-old Kumar Neppalli to 44 months in prison and ordered him to pay nearly $1 million back to victims he defrauded. Neppalli was arrested in January 2023 on 17 counts of wire fraud and six money laundering charges, the former of which he pleaded guilty to.

Neppalli, who is a Cary resident, worked as a transportation engineer for the Town of Chapel Hill. He retired from the local government in the fall of 2021 — around when Chapel Hill elected officials began receiving messages about Neppalli scamming people out of their money. At the time, the town government told Chapelboro it was reviewing Neppalli’s actions and later clarified after his 2023 arrest that no “irregularities” were found in his work with Chapel Hill.

But prosecutors said Neppalli was leveraging his relationships in the Indian American community in the Triangle to take people’s money. The Justice Department said Neppalli would falsely tell people he had real estate opportunities in Orange County and use his employment with the Town of Chapel Hill to convince them he had insider knowledge of development plans. He would then ask people to invest their money with his projects, usually requesting a specific amount within a short timeframe. Sometimes, Neppalli would pay those victims back months later saying it was profits from the investment — when instead it was funds he’d taken from other victims.

Kumar Neppalli, a former engineer for the Town of Chapel Hill, poses during the 2018 Staff Bike Ride. (Photo via the Town of Chapel Hill.)

Michael Easley, who is the U.S. Attorney for the Eastern District of North Carolina where Neppalli was prosecuted, called the Cary resident a conman.

“It was a pure Ponzi scheme,” Easley said in Wednesday’s release, “stoking false hopes of financial success, but using new investor money to pay off earlier investors, while masquerading those payments as legitimate profits. Investors should beware affinity fraudsters like Neppalli promising outsized returns on short timelines while exploiting membership in a particular religious or ethnic group to gain credibility and target victims.”

“Neppalli swindled members of his own tight-knit community,” said Robert DeWitt, the FBI Special Agent in Charge in North Carolina. “He pretended to have inside information to make them rich, instead many victims lost their entire life savings. While fraud of this magnitude can have a lasting impact, we hope the time Neppalli must serve in federal prison brings a sense of justice to his victims.”

The full release from the U.S. Department of Justice on Neppalli’s sentencing can be found here.

Chapelboro.com does not charge subscription fees, and you can directly support our efforts in local journalism here. Want more of what you see on Chapelboro? Let us bring free local news and community information to you by signing up for our biweekly newsletter.

Ex-Chapel Hill Staffer Sentenced Over Ponzi Scheme, Ordered to Pay Nearly $1 Million

On Air Now: 97.9 FM