Budamala Raghav Reddy Charged with COVID-Relief Loans Wire Fraud
February 25, 2022 - Irvine, Orange County based Indian Budamala Raghav Reddy (35) was charged with fraudulently obtaining more than five million in COVID-relief loans for three sham companies.
Budamala Raghav Reddy fled after authorities searched his Orange County residence on February 23, 2022, but was arrested at the US-Mexico border on February 24, 2022 and was taken into federal custody.
According to an affidavit filed with criminal complaint today:
...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 United States 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 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, 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.
ChargesThe charges against Budamala Raghav Reddy as per complaint filed today include:
- One count of wire fraud
Potential PenaltyIf convicted, Budamala Raghav Reddy would face a statutory maximum sentence of 20 years in federal prison.
ImportantThe charges filed against Irvine, Orange County Indian Budamala Raghav Reddy are mere allegations and he must be presumed innocent unless and until proven guilty in a court of law.
Budamala Raghav Reddy made his initial court appearance on Thursday, February 24, 2022 in US District Court in Los Angeles and was held without bond as he posed a flight risk.