Business owner guilty after being 'shaken down', not telling cops

Call it a cautionary tale of going with the flow.

The only thing Shyam Singh did wrong was get shaken down, his lawyer said.

But instead of going to the FBI, the 56-year-old Rockford entrepreneur, scientist and owner of two companies played along.

Now Singh's a felon, guilty of mail fraud. Not only is the business he was trying to keep for his company gone, but he'll be prohibited from working on any government contracts in the future. He also is on the hook for $325,000 that prosecutors say a Bartlett man, Saverio "Peter" Barone, stole.

"It's clear that you have lived a very honorable life," Judge Joan Lefkow said Friday when she reduced Singh's sentence from a possible 12-18 months to two years probation.

Even the U.S. attorney's office, which is not prone to attacks of sugar-coating defendants' criminal involvement, signed off on the wording of Singh's plea agreement, which noted he agreed to pay Barone only because he feared his companies would lose business if he did not.

Barone worked for Gas Research Institute, or GRI, a Des Plaines company. It's successor company is Gas Technology Institute, or GTI.

Here's how Singh got stung:

Singh had previously done a research project for GRI/GTI analyzing the toxic properties of certain chemicals emitted in the coffee-bean roasting process. The work was on the up-and-up, and Singh submitted a complete report on his work. Later, in 1999, Singh suggested GRI/GTI fund another study on how to reduce those toxic emissions.

Barone, a manager at the company, agreed, but demanded a kickback of $12,000 of the $80,000 project, the plea agreement said. Not only would Singh not get the contract without the kickback, but he believed he would lose other future GTI/GRI business, court documents said.

Singh reluctantly went along. But once Barone had Singh partway down the slippery slope, he kept pulling, court documents said.

Barone told Singh that a consulting company Barone owned had been hired to do work for another company he did not identify. Problem was, the plea agreement said, Barone told Singh there was a professional conflict of interest between Barone and the company, so he couldn't be discovered billing for the work.

If Singh would bill for the work instead, and pass along the payments to Barone, Barone would let Singh keep about $25,000 of the payments, court documents said.

Singh, his plea agreement said, honestly believed Barone was actually doing the work, but couldn't bill for it. Singh figured Barone was merely double-dipping on GTI/GRI, doing work for them both directly and through his consulting company.

Again, afraid he might lose work if he didn't cooperate, Singh went along. Later, when he never got a report from Barone on the work, he suspected the truth: that Barone had in fact done no work and was fraudulently billing for non-existent studies.

But at that point, it was too late. Singh was in too deep.

"I have made a colossal mistake here which I will always feel I should have never gotten involved in," Singh told Judge Lefkow in court Friday. "I apologize to you. … I am ashamed of my behavior."

At that point, he began to beg for leniency, citing a desire not to be separated from his wife by prison.

"She is my lifeline," said Singh, who broke down in tears, unable to continue. His wife, in the courtroom, also doubled over in tears, her face in her hand.

Barone has been charged with mail fraud in a related case, which is pending. However, Assistant U.S. Attorney Carolyn McNiven told the judge that Barone is near death and no money will likely be recovered from him.

Barone could not be reached for comment Friday.