On Thursday, Feb. 24, an Irvine man was arrested at the US-Mexico border on charges of fraudulently obtaining more than $5 million in COVID-relief loans for three sham companies, the federal officials say.
Reddy Raghav Budamala, 35, was arrested at the U.S.-Mexico border early Thursday, a day after authorities searched his home, the DOJ said in a press release.
Following the outbreak of the COVID-19 pandemic and the enactment of federal programs designed to address the subsequent economic fallout, Budamala allegedly submitted to the Small Business Administration seven applications for pandemic-relief loans under the Paycheck Protection Program and Economic Injury Disaster Loan.
According to the DOJ, he is suspected of submitting seven applications for pandemic-relief loans under the Paycheck Protection Program and Economic Injury Disaster Loan using three shell companies he acquired or founded in 2019 — Hayventure LLC, Pioneer LLC, and XC International LLC.
The addresses listed for the companies were bogus, nonexistent, or residential.
“As part of the applications filed from April 2020 through March 2021, Budamala falsely represented to the banks administering the COVID-relief business loan programs that his companies employed dozens of individuals and earned millions of dollars in revenue, and that he needed the money for payroll and business expenses,” the release said.
Budamala was granted loans for six of the seven applications, totaling nearly $5.2 million.
Though Budamala said the funds were spent on payroll expenses, there were no records of those companies paying wages to any employees. An official said that he instead had purchased a $1.2 million investment property in Los Angeles, a $597,585 property in Malibu, a $970,000 investment in an EB-5 Immigrant Investor Visa Program, and a nearly $3 million deposit into his personal TD Ameritrade account, according to the news release.
He then applied to have multiple loans forgiven, the DOJ added.
Once the loans were funded, Budamala used the money to pay for personal expenses, including the purchase of a $1.2 million investment property in Los Angeles, the purchase of a $597,585 property in Malibu, a $970,000 investment in an EB-5 Immigrant Investor Visa Program and a nearly $3 million deposit into Budamala’s personal TD Ameritrade account, according to the affidavit.
Budamala, who faces a charge of wire fraud, is being held without bond because he is a flight risk, a judge ruled Thursday afternoon. He faces a maximum of 20 years in federal prison if convicted.
Sources: Breaking911, Justice.gov, News.yahoo
