Irvine Man Arrested on Charges of Fraudulently Obtaining Over $5 Million in COVID Relief Loans for Shell Companies | USAO-CDCA

0

LOS ANGELES – An Orange County man who fled after authorities raided his residence on Wednesday is in federal custody today after being arrested at the US-Mexico border and charged with fraudulently obtaining more than $5 million in COVID relief loans for three shell companies.

Reddy Raghav Budamala, 35, of Irvine, was arrested at the border early Thursday morning by federal law enforcement and made his first appearance Thursday afternoon in United States District Court in Los Angeles . At that hearing, a United States magistrate ordered Budamala to be held without bail because he was a flight risk.

A criminal complaint filed Thursday accuses Budamala of one count of wire fraud.

According to an affidavit filed with the complaint, Budamala formed or acquired three shell companies in 2019 with no operations – Hayventure LLC, Pioneer LLC and XC International LLC. Following the outbreak of the COVID-19 pandemic and the enactment of federal programs designed to deal with the economic fallout from the pandemic, Budamala reportedly submitted to the Small Business Administration (SBA) seven applications for pandemic relief loans in under the Paycheck Protection Program (PPP) and Economic Disaster Loan (EIDL).

As part of applications filed from April 2020 to March 2021, Budamala falsely told banks administering COVID relief business loan programs that his businesses employed dozens of people and earned millions of dollars in revenue, and that he needed the money for payroll and business expenses, the affidavit alleges.

Addresses listed for businesses were fake, non-existent, or residential. The states where the Budamala businesses are said to have operated have no record of these businesses paying salaries to employees, and the businesses’ bank records do not reflect any significant business income or operating expenses. During a February 2021 interview with a State Department official in an unsuccessful attempt to obtain a US passport, Budamala said he wanted the passport so he could get a job, according to the affidavit.

The SBA and the banks funded six of the loans and disbursed $5,151,497, the affidavit says. Budamala allegedly requested the cancellation of several of the loans and falsely stated that he had used all of the SBA money for payroll.

Once the loans were funded, Budamala used the money to pay for his personal expenses, including buying a $1.2 million investment property in Los Angeles, buying a $597,585 property in Malibu, a $970,000 investment in an EB-5 immigrant investor visa program. and a nearly $3 million deposit in Budamala’s TD Ameritrade personal account, according to the affidavit.

A complaint contains allegations that an accused has committed a crime. Any defendant is presumed innocent until proven guilty and unless proven beyond a reasonable doubt.

If convicted of the charge, Budamala faces a maximum statutory sentence of 20 years in federal prison.

The IRS Criminal Investigation, the FBI, and the Office of the Inspector General of the Small Business Administration investigated this matter.

Assistant United States Attorney Gregory D. Bernstein of the Major Fraud Section is prosecuting the case.

In May 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to mobilize Department of Justice resources in partnership with agencies across government to intensify enforcement efforts. and prevention of pandemic-related fraud. The task force strengthens efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies administering relief programs to prevent fraud, among other methods, by increasing and integrating coordination mechanisms existing ones, identifying resources and techniques to uncover fraudulent actors and their agendas, and sharing and leveraging information and knowledge gained from previous enforcement efforts. For more information about the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about alleged attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) hotline at 866-720-5721 or via NCDF’s online complaint form at: https://www. .justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

Share.

Comments are closed.