Former KBS auditor Varun Aggarwal sentenced to prison for embezzlement

KBS Realty Advisors’ former chief auditor, Varun Aggarwal, has been sentenced to 33 months in prison for embezzlement, the U.S. Department of Justice announced Thursday. 

Aggarwal pleaded guilty in August to stealing $2.7 million from KBS and funneling the money into personal accounts. He had faced a maximum of 20 years in prison.

“[Aggarwal] was not driven to commit his crimes by need, desperation or the inability to legitimately earn a living,” prosecutors said in a sentencing memorandum. 

“Despite the advantages defendant enjoyed — including a first-rate education and a well-compensated professional career — [Aggarwal] chose to commit the underlying criminal conduct causing great losses and abusing his position of trust over a lengthy period of time,” prosecutors added. 

KBS and its affiliates operate several non-traded real estate investment trusts, plus other investment 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 worked at the Newport Beach-based firm for 14 years and resigned from the company in January after KBS began looking into some of his invoices, according to the criminal complaint filed in November. 

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.

Under the agreement, Aggarwal had to pay $2.8 million in restitution, in addition to the prison time. 

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.”