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Published Friday, January 21, 2000, in the San Jose Mercury News


Landlord denies importing girls for sex
Authorities say probe expanding in case involving Berkeley man
BY ALEXIS CHIU, PUTSATA REANG
AND BRANDON BAILEY
Mercury News Staff Writers

As a prominent Berkeley restaurateur and landlord, Lakireddy Bali Reddy was a pillar of the Bay Area Indian community. But on Thursday night he sat in jail, tearfully denying allegations that he imported at least three teenage girls from India for sex.

``I pray to God I get out of here,'' Reddy, 62, said, during an interview in the Alameda County jail in Oakland, where he has been held on federal charges since last Friday. ``I don't know who can help me. A lot of people come to me -- I always help them. God will help me.''

Some in the Bay Area Indo-American community share the view of Reddy as a benefactor of immigrants and generous philanthropist here and in his native India, where he founded a college. But others say they have had concerns about Reddy's treatment of the immigrants he employed for labor. Many are surprised by the extent of the allegations against him.

In a 30-minute interview, the balding businessman denied that he purchased the girls from their parents in India and said it was ``nonsense'' to suggest he brought them to the United States for sex. But he refused to answer when asked directly if he'd had sex with any of the girls.

Though authorities have described two of the girls as 15 and 16, Reddy said he thought they were all over 18.

Police and federal agents, meanwhile, say they're investigating whether the case involves other victims -- and suspects.

``We believe the likelihood is that he could have engaged in this activity previously,'' said Chuck DeMore, district director for the U.S. Immigration and Naturalization Service.

Authorities suspect the girls may have been sexually abused by other men, although there's no indication they were part of an organized prostitution ring, DeMore added.

Other officials say Reddy may have arranged for a number of adults and children to enter the United States, using false names and bogus visas that capitalized on a program to help high-tech firms fill jobs that require special skills. Many of these individuals were women who labored long hours with little compensation, said Berkeley police Capt. Bobby Miller, who said the case ``may involve other cities, counties and states.''

Many friends and relatives have risen to Reddy's defense since the charges surfaced this week. They say Reddy, the son of farmers in India, used the wealth he amassed from his business empire in the United States to help people here and in his native village in the south Indian state of Andhra Pradesh.

``My dad would never hurt anybody. . . . He's a very responsible person,'' said Reddy's son, Vijay K. Lakireddy of Berkeley. He said his father's accusers ``are distraught people. I know they're desperate.''


Heard of complaints

But an attorney with the non-profit Asian Law Caucus said Thursday that her group had heard complaints for more than a year about Reddy's treatment of new immigrants -- including a number of young women who worked in his restaurant and at his rental properties.

A resident at one of Reddy's apartment buildings on Bancroft Way in Berkeley, who asked not to be identified, said she saw young women, many in elegant saris, doing maintenance and construction tasks.

However, nobody was willing to go on the record with information about mistreatment, said Hina Shah of the law caucus. ``We had no verifiable allegations.''

Authorities say that changed after a 16-year-old girl died of carbon monoxide poisoning from an improperly ventilated gas heater in one of Reddy's apartment buildings in November. Her 15-year-old sister, who lived with her, survived.

An anonymous letter-writer told Berkeley police that the dead girl had emigrated from India with the aid of a phony visa.

After questioning the sister and a roommate, as well as the man and woman who claimed to be the parents of the two sisters, police and federal authorities say they uncovered a complex scheme:

The two girls said Reddy, on his frequent trips back home to India, had been having sex with them since they were 12 and 14 years old, according to a federal affidavit. They said he eventually brought them to the United States, along with the girl who died, so he could continue having sex with them.

The man and woman, who admitted they weren't the girl's parents, told how Reddy allegedly carried out the scheme. According to the federal affidavit, the man -- known as Venkateswara Vemireddy -- told authorities he agreed to pose as the father of two girls, after Reddy promised to get him an H-1B visa. H-1B visas allow immigrants with special technical skills to enter the United States for jobs that would be otherwise difficult to fill.

Vemireddy's visa was granted so he could work for Active Tech Solutions, a firm managed by Reddy's son, Vijay. But authorities say Vemireddy instead went to work at Reddy's Indian restaurant in Berkeley, Pasand.

The girls, meanwhile, were able to enter the United States on visas that listed them as dependents of Vemireddy, according to the affidavit.

Vijay K. Lakireddy denied that his company was being used as a front for people entering the country on phony visas.

``Everybody who's come over under petition from my company has the proper certification,'' he said.

Federal officials say they've had problems with abuse of the H-1B program, which has been expanded in recent years. But DeMore said authorities are especially disturbed by the Reddy case.

``I would say this case is particularly egregious,'' he said, ``given the age of the victims, the length of their servitude and the terrible acts that they were subject to -- and the fact that these acts were done by someone who has apparently significant financial means.''

Reddy is scheduled to appear in federal court today on two felony counts: bringing immigrants into the United States for immoral purposes and inducing others to enter this country fraudulently.


Raised in south India

Lakireddy Bali Reddy was born and raised in Velvadam, an agricultural village of about 3,000 residents in south India, where his father cultivated rice and mangoes. While his family had little money, friends say his parents encouraged Reddy to study.

He immigrated to America about 30 years ago to study engineering under scholarships at the University of California-Berkeley, according to close friend, Jay Ram, owner of Swagat restaurant in Milpitas. In the '80s, Reddy began his first business venture by opening a small Indian restaurant in Emeryville, Pasand, where Ram once worked part-time as a waiter and manager.

The restaurant took off, and Reddy eventually opened several more in the Bay Area. He also began opening other businesses and acquiring rental properties, and over the years was the subject of several complaints from tenants who alleged he violated Berkeley's rent control laws.

As his businesses thrived, Ram said, Reddy regularly returned to India, where he used his earnings to build a college and high school.

``He's very decent and very well-known,'' said Ram. ``He did help a lot of people. He's not a bum off the streets.''

Fellow restaurateur Kishore Kripalani, president of Gaylord restaurants in San Francisco and Menlo Park, agreed that the charges against Reddy are hard to believe.

``He's a very honorable man. Why would he indulge in something like that?'' Kripalani asked.

Manjul Batra, president of the IndoAmerican Chamber of Commerce of Northern California, said she'd known Reddy for 25 years and suggested that if Reddy had sex with any girls, it would have been consensual.

``He's a bachelor,'' Batra said. ``If they want to have fun, and he wants to have fun, no one in the world can stop that.''

If the girls were being victimized against their will, she added, someone in the close-knit Indian immigrant community would have heard about it and stepped forward.

But one expert said it's not at all uncommon for female immigrants to endure sexual exploitation in silence. Girls brought to America under such circumstances won't come forward for fear of being discovered that they're here illegally, said Chaya Bhuvaneswar, a Stanford researcher who has studied the sex trade and spread of HIV among South Asian women.

``The fear is that they'll be deported, or they'll be found out,'' Bhuvaneswar said.




Mercury News staff writers Dennis Akizuki, Alan Gathright and T.T. Nhu and researcher Leigh Poitinger contributed to this report.



Contact Alexis Chiu at achiu@sjmercury.com or (510) 790-7313. Contact Putsata Reang at preang@sjmercury.com or at (510) 790-7316.