David Hammer / Eyewitness News
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NEW ORLEANS Crooked contractor Praveen Kailas copped to theft and conspiracy charges after WWL-TV exposed his fraud in a state Katrina housing program.

But now that he's to be sentenced Wednesday, he wants his day in court.

In the last month before his sentencing, Kailas hired high-profile criminal defense attorneys Kyle Schonekas and Billy Gibbens and contested how much money he truly stole from the Road Home Small Rental Repair Program.

Schonekas and Gibbens filed paperwork in federal court admitting, again, that Kailas committed fraud and taxpayer money, but disputing the government's claim that it was $236,000. His lawyers now say he only stole about $60,000.

A few key differences led to the calculation discrepancies, and that's what Chief U.S. District Judge Sarah Vance will have to weigh at Wednesday's hearing.

First, Kailas contends that his boss, Small Rental Program Director Mark Maier, allowed Kailas to bill full-time hours, even when his employees were not conducting construction-monitoring inspections.

The government claimed more than 3,700 hours were fraudulent based on the number of inspections Kailas' six employees really performed; Gibbens and Schonekas contend that the government should only count the truly fraudulent hours, when those six workers were not working at all or actually engaged in other projects such as building a mansion for the Kailas brothers on Bayou St. John, or selling and overseeing home elevation jobs for another company Kailas owned.

An accountant analyzed Kailas' public billing records and tallied up the hours Kailas admitted overbilling prime contractors Shaw and ACS/Quadel, the companies being paid by the state to run the Small Rental program.

It was 964 hours, about a quarter of the government's tally.

Secondly, even if the two sides agreed on the number of fraudulent hours, they differed on the rate of pay that should be used to calculate the fraud. The government used the amount the state had to pay Shaw and ACS/Quadel for those bogus hours. Gibbens and Schonekas hired accountant Joey Richard to run the numbers, and he used what the prime contractors turned around and paid Kailas' company Lago Construction.

Those fewer hours identified by Kailas' team cost the state $77,353, while Kailas' company got $60,704 of it, according to WWL-TV's analysis of the data.

That's because, under ACS/Quadel, Kailas' employees made $70 an hour and the prime contractors got to keep $36 for each hour they worked. After Shaw took over in February 2012, it got to keep $11 an hour for itself after paying Kailas' people $60 an hour.

Loyola University Law Professor Dane Ciolino said the dispute is critical to reducing Kailas' sentence, possibly by more than a year.

'The amount of loss attributable to fraud is the key determining factor as to what the sentencing guidelines range is going to be in the case,' Ciolino said. 'So it's of critical importance to the defendant that that number be as low as possible.'

Still, this kind of challenge at sentencing is rare.

'Defendants usually perhaps will object here and there, but not request a full-blown evidentiary hearing,' he said. 'So the hearing set for tomorrow is itself unusual and a bit out of the ordinary.'

It's interesting that Kailas is essentially pinning some of the responsibility on Maier because he's the program director who cleared Kailas of any wrongdoing when WWL-TV first questioned Kailas' billing practices in October 2012. The station discovered that Maier named Kailas' company, Lago, as a business partner on his consulting website.

When WWL reported the apparent conflict and Maier's report clearing Lago, the Division of Administration replaced Maier as director of the program.

Kailas is also disputing whether he should be penalized extra for being the leader of a conspiracy involving at least five people. He contends the six employees didn't participate in the theft.

And the government is clearly annoyed by Kailas' combative position, so much so that prosecutors want to withhold credit Kailas would normally get for admitting his guilt. Ciolino found that extraordinary as well.

'It does strike me as bordering on vindictive that the government would want the defendant to be deprived of those three points simply because he dare ask for a hearing,' he said.

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