Indian American charged with $5 million Covid-relief loan fraud

Fleeing Reddy Raghav Budamala of Orange County arrested at the US-Mexico border

An Indian American man has been charged with fraudulently obtaining more than $5 million in Covid-relief loans for three sham companies after he was arrested at the US-Mexico border as he tried to flee.

Reddy Raghav Budamala, 35, of Irvine, who fled after authorities searched his Orange County residence on Wednesday was arrested at the border early Thursday morning by federal law enforcement man.

Budamala was ordered held without bond because he posed a flight risk by a United States Magistrate Judge during his initial court appearance Thursday in the US District Court in Los Angeles.

Read: Indian American pleads guilty to $25 million Covid-relief fraud (March 25, 2021)

A criminal complaint filed Thursday charges Budamala with one count of wire fraud, according to a press release from the US Attorney’s Office, Central District of California. If convicted, Budamala would face a statutory maximum sentence of 20 years in federal prison.

According to an affidavit filed with the complaint, Budamala in 2019 formed or acquired three shell companies 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 address the economic fallout from the pandemic, Budamala allegedly submitted to the Small Business Administration (SBA) seven applications for pandemic-relief loans under the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL).

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 affidavit alleges.

The listed addresses for the companies were bogus, nonexistent or residential. The states where Budamala’s companies purportedly operated have no records of those companies paying wages to any employees, and bank records for the companies reflect no 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.

Read: Indian American engineer pleads guilty to $10 million covid-relief fraud (February 11, 2021)

The SBA and the banks funded six of the loans and disbursed $5,151,497, the affidavit states. Budamala allegedly applied to have several of the loans forgiven and falsely represented that he had used the SBA money entirely for payroll.

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 and a $597,585 property in Malibu.

Read: Irvine Man Arrested on Charge Alleging He Fraudulently Obtained More Than $5 Million in COVID-Relief Loans for Sham Companies (February 25, 2022)

Budamala also made 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 affidavit.

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