LOS ANGELES – An Orange County man who fled after authorities searched his residence on Wednesday is in federal custody at the moment after he was arrested on the U.S.-Mexico border and charged with fraudulently acquiring greater than $5 million in COVID-relief loans for 3 sham corporations.
Reddy Raghav Budamala, 35, of Irvine, was arrested on the border early Thursday morning by federal legislation enforcement and made his preliminary court docket look Thursday afternoon in the US District Court docket in Los Angeles. At that listening to, a United States Justice of the Peace Decide ordered Budamala held with out bond as a result of he posed a flight danger.
A legal grievance filed Thursday costs Budamala with one rely of wire fraud.
In keeping with an affidavit filed with the grievance, Budamala in 2019 shaped or acquired three shell corporations with no operations – Hayventure LLC, Pioneer LLC, and XC Worldwide LLC. Following the outbreak of the COVID-19 pandemic, and the enactment of federal applications designed to handle the financial fallout from the pandemic, Budamala allegedly submitted to the Small Enterprise Administration (SBA) seven purposes for pandemic-relief loans beneath the Paycheck Safety Program (PPP) and Financial Harm Catastrophe Mortgage (EIDL).
As a part of the purposes filed from April 2020 via March 2021, Budamala falsely represented to the banks administering the COVID-relief enterprise mortgage applications that his corporations employed dozens of people and earned tens of millions of {dollars} in income, and that he wanted the cash for payroll and enterprise bills, the affidavit alleges.
The listed addresses for the businesses have been bogus, nonexistent or residential. The states the place Budamala’s corporations purportedly operated haven’t any data of these corporations paying wages to any staff, and financial institution data for the businesses replicate no important enterprise earnings or working bills. Throughout a February 2021 interview with a State Division official in an unsuccessful try and get hold of a United States passport, Budamala mentioned he needed the passport so he may get a job, in accordance with the affidavit.
The SBA and the banks funded six of the loans and disbursed $5,151,497, the affidavit states. Budamala allegedly utilized to have a number of of the loans forgiven and falsely represented that he had used the SBA cash totally for payroll.
As soon as the loans have been funded, Budamala used the cash to pay for private bills, together with the acquisition of a $1.2 million funding property in Los Angeles, the acquisition of a $597,585 property in Malibu, a $970,000 funding in an EB-5 Immigrant Investor Visa Program and an almost $3 million deposit into Budamala’s private TD Ameritrade account, in accordance with the affidavit.
A grievance accommodates allegations {that a} defendant has dedicated a criminal offense. Each defendant is presumed harmless till and until confirmed responsible past an inexpensive doubt.
If convicted of the cost, Budamala would face a statutory most sentence of 20 years in federal jail.
IRS Felony Investigation, the FBI, and the Small Enterprise Administration’s Workplace of Inspector Basic investigated this matter.
Assistant United States Lawyer Gregory D. Bernstein of the Main Frauds Part is prosecuting this case.
In Might 2021, the Lawyer Basic established the COVID-19 Fraud Enforcement Job Drive to marshal the sources of the Division of Justice in partnership with companies throughout authorities to reinforce efforts to fight and stop pandemic-related fraud. The Job Drive bolsters efforts to research and prosecute essentially the most culpable home and worldwide legal actors and assists companies tasked with administering reduction applications to forestall fraud by, amongst different strategies, augmenting and incorporating current coordination mechanisms, figuring out sources and strategies to uncover fraudulent actors and their schemes, and sharing and harnessing info and insights gained from prior enforcement efforts. For extra info on the division’s response to the pandemic, please go to https://www.justice.gov/coronavirus.
Anybody with details about allegations of tried fraud involving COVID-19 can report it by calling the Division of Justice’s Nationwide Heart for Catastrophe Fraud (NCDF) Hotline at 866-720-5721 or through the NCDF Internet Grievance Kind at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.