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Reddy will serve at least five years; pay $2 million fine 

The year-long criminal prosecution of Berkeley landlord Lakireddy Bali Reddy culminated dramatically in federal district court Wednesday when Reddy pleaded guilty to sex, tax and immigration offenses and offered a tearful apology to his family before being taken into custody by United States Marshals.  

Reddy will serve at least five years in prison and pay $2 million to four of his victims under a plea agreement with the United States Attorney’s office.  

Reddy admitted Wednesday to falsifying visa applications for teenage girls brought to the United States from India so he could have sex with them, and to tax evasion. Government lawyers told the judge that one of Reddy’s victims was only 13 years old when she entered the country in October 1993. 

“I want to apologize to you, to the court and my family for the shame I brought on them,” Reddy said, addressing himself to Judge Saundra Brown Armstrong before a packed courtroom. “I am very, very sorry,” he said. Reddy’s 31-year old son Vijay Kumar Lakireddy, who still faces related charges, wept as his father was led away by federal marshals. 

Reddy’s immediate incarceration Wednesday came as somewhat of a surprise. Lawyers for the defense and prosecution had asked the judge to allow Reddy to remain free on bail until sentencing so he could raise the $2 million cash fine required under the plea deal. But judge Armstrong denied that request Wednesday. She ruled that because Reddy was pleading guilty to a violent crime, federal law required that he be taken into custody immediately after pleading guilty.  

The judge also declined to order that Reddy be detained in a halfway house, and refused to allow him to surrender in two weeks. “The mandatory detention provision recognizes that given the seriousness of the offense, persons should be remanded into custody immediately,” she said.  

Reddy deliberated with his lawyers for more than an hour after the judge issued her ruling on that issue. He finally decided to go ahead with a guilty plea. Reddy had been free on $10 million bail since January 2000 and was living with a brother in Merced.  

Under the plea agreement, which must still be approved by the judge, Reddy will serve at least five years and three months in jail and pay $2 million to four unidentified teenage victims or their families. He must also register with the state as a sex offender upon his release from prison and surrender any assets obtained as a result of his crimes. Reddy could be sent to prison for as long as six 1/2 years if the judge imposes a sentence at the top of the range agreed to by the parties. Armstrong said she will sentence Reddy on April 10.  

Lawyers with the American Civil Liberties Union and other advocacy groups arrayed against Reddy were jubilant after the hearing.  

“We are very pleased,” said Jayashri Srikantiah of the ACLU, which is collaborating with a San Francisco law firm to seek civil damages on behalf of a number of alleged victims. “Mr. Reddy has been unmasked as a violent criminal offender,” she said. “For almost 15 years he has been bringing young girls into the country for illegal sex and cheap labor,” while pretending to be (only) a businessman, she said.  

San Francisco lawyer Michael Rubin, who represents some of the victims, said settlement discussions with Reddy have been ongoing for several months, but declined to say how much money he is seeking. Reddy has U.S. property holdings valued at more than $70 million. In pleading guilty to tax fraud Wednesday he also admitted he had concealed foreign bank accounts. 

Attorney Alan Sparer, who represents Reddy in the civil action, acknowledged the East Bay real estate tycoon could settle any civil actions with a cash payment before a lawsuit is even filed. “It’s a negotiation not unlike most other cases,” he said. “You try to find a number you think is fair.” 

Civil actions filed against Reddy would likely be based in part on the accidental death in November 1999 of Chanti Jyotsna Devi Prattipati, an Indian teenager who died of carbon monoxide poisoning in one of Reddy’s apartment buildings. Prattipati’s death, and the subsequent discovery that she was pregnant, led to the investigation that culminated with Reddy’s guilty pleas Wednesday. 

Previously undisclosed details of the government’s case emerged at Wednesday’s hearing as federal prosecutors summarized evidence they had gathered during an investigation that began early last year. 

Prosecutor Bharathi Venkatraman, a civil rights attorney with the U.S. Department of Justice in Washington, D.C., said that since 1986 Reddy had “organized, managed and directed a conspiracy” to falsify visa petitions and passports for teenage Indian girls whom Reddy harbored and employed in his real estate and restaurant businesses. She said the girls were “wholly dependent” on Reddy for their housing, food and employment. 

“These were vulnerable victims from extremely poor families from lower castes in India who were desperate to come to the United States,” she said. 

Venkatraman said Reddy intended to have sex with girls who were under 16 when they entered the country. She said one victim was only 11 years old when Reddy falsified her visa application, but was 13 years old by the time she arrived in 1993. None of the victims was identified by name. Last Friday Judge Armstrong ruled that all victims’ names in the case would be deleted from public documents in the case. 

Reddy’s lawyer pointed out that despite the government’s claims, a number of witnesses had given testimony that contradicted what prosecutors said Reddy had done. But with Wednesday’s guilty pleas, that evidence will not be presented. 

A dozen FBI and INS investigators who worked on the case sat in the back of the courtroom during the hearing. They refused to speak with reporters afterwards. Reddy’s 47-year-old brother, Jayaprakash Lakireddy, who along with his wife pleaded guilty on Monday to conspiring with Reddy to file false visa applications, also watched the proceedings. Reddy’s youngest son sat in the front row, conferring occasionally with his lawyer.  

Both of Reddy’s sons, 42-year-old Prasad Lakireddy and 31-year-old Vijay Kumar Lakireddy, had at one point indicated their willingness to plead guilty, but changed their minds late last year and will now fight charges they conspired with their father and other relatives to commit immigration fraud. 

Reddy wore a tie and suit jacket to Wednesday’s court session, dispensing for the first time in many court appearances with his customary white running shoes. When he was addressed by the judge Reddy replied softly in lilting, accented English, “Yes, your Honor,” or “No, your Honor.” Asked by the judge how he pleaded to the charges he replied each time, “Guilty, your Honor.” 

Asked to describe what he had done, Reddy told the judge, “I brought Victims 2 and 3 into the United States knowing they were minors and intending to have sex with them.” He also admitted filing a tax return stating he had no foreign bank accounts. 

As part of the plea deal between Reddy and federal prosecutors, the Alameda County District Attorney’s office agreed not to charge Reddy with any crimes. The U.S. Attorney’s office agreed as well not to call Reddy to testify against his sons.