Mt. Lebanon man accused of insurance fraud has ties to Westmoreland County properties

A Mt. Lebanon man is accused of asking someone to set fire to a Pittsburgh property he controlled, filing a fraudulent insurance claim related to the loss and attempting to hide behind multiple fake bankruptcy filings in an effort to avoid paying debts, according to a federal indictment unsealed Wednesday.

Prasad Margabandhu, 47, was scheduled for an initial appearance in Pittsburgh federal court Wednesday afternoon, according to court filings. Prosecutors recommended he be detained in a motion for an arrest warrant.

The June 2022 fire, on East Carson Street in Pittsburgh’s South Side neighborhood, was called difficult to fight by investigators, who initially deemed it suspicious. No one was hurt. The three-story building was vacant and it had been assessed in 2018 at nearly $300,000.

Margabandhu got control of the property through Shane Tracy Enterprises Inc. in March 2019, the day a sheriff’s sale was scheduled related to unpaid property taxes to Pittsburgh and Allegheny County. The previous owner sold it to him for $5,000. The move came about a year and a half after a mortgage foreclosure action was filed on the property, according to the indictment.

A grand jury found that Margabandhu in the months afterwards repeatedly filed fake bankruptcy petitions related to the East Carson Street property, which blocked sheriff’s sales and left those attempting to collect debts related to the property hamstrung. Those petitions were filed days before scheduled sheriff’s sales, according to the indictment.

On May 2, 2022, Margabandhu bought an insurance policy on the building. Sometime the following month, he is accused of soliciting a person identified in the indictment only as “C.U.” to set the building on fire in exchange for payment. After the blaze, Margabandhu made a false insurance claim, the indictment states.

He is charged with bankruptcy fraud, mail fraud, malicious destruction of property by fire and conspiracy to maliciously destroy property by fire. He did not have an attorney listed in court records.

Margabandhu has been involved in property issues in Allegheny and Westmoreland counties for years.

He and his brother, through a real estate company, have been fighting North Huntingdon’s 2019 order to demolish the former Rivertowne Tavern structure along Route 30. Township commissioners determined the building was unfit for human use.

The real estate company filed an appeal which is now before the state Commonwealth Court. The bar closed in 2018 because of Rivertowne’s bankruptcy and Margabandhu purchased one-half interest in it.

He also fought with the owner of Westmoreland Mall over his failure to pay rent on the former Winghart’s Burger and Whiskey Bar, which was behind the Hempfield mall. About $91,000 in rent and costs over two years was owed, a judge ruled. North Huntingdon officials rejected in 2019 a request to transfer an expired liquor license from Winghart’s to Rivertowne.

Margabandhu was accused in August by Westmoreland County detectives of giving county officials a bad $25,000 check in an effort to halt a tax sale of a five-bedroom home he owns in Murrysville, according to court papers. It was unclear what happened to the case.

A Penn Hills apartment complex Margabandhu owned was cited for a number of code violations that resulted in 25 families being forced to move in 2018.