May 29–A Knoxville hotelier has been indicted on federal fraud charges for allegedly bilking an East Tennessee bank for nearly $6 million in connection with the purchase and renovation of a Cedar Bluff area hotel, prosecutors said.

Jayesh Dahyabhai Patel, 48, was indicted May 13 on five counts of bank fraud in U.S. District Court in Greeneville, according to a news release from U.S. Attorney Bill Killian’s office.

Patel, doing business as QIS Knoxville LLC, secured a $5.8 million loan from First Community Bank of East Tennessee to purchase and renovate a Knoxville hotel, the release states.

According to property records, QIS Knoxville purchased the Quality Inn & Suites, 321 N. Cedar Bluff Road, for $3.5 million in July 2009.

The indictment alleges that from January 2009 through August 2011, Patel provided false income tax returns for himself and his business to the bank to secure the loan. He also is accused of later submitting false invoices to disburse the loan funds, and providing additional false tax returns to obtain an increase in the loan amount and to secure a six-month, interest-only payment period, according to Killian’s office.

The indictment further alleges that Patel, “fraudulently induced First Community Bank to make a second loan to finance the sale of a motel by Patel to a relative by providing false information as to the down payment on the purchase,” the release reads.

QIS Knoxville LLC filed for bankruptcy in August 2011. The Cedar Bluff property was sold for $4 million in March 2013.

Patel pleaded not guilty before U.S. Magistrate Judge Dennis Inman on Thursday. He was released pending trial, which is set for July 23.