An Irvine man accused of fraudulently obtaining more than $5 million in COVID-relief loans for three sham companies was arrested at the U.S.-Mexico border on Thursday Feb. 24, federal officials said.
Reddy Raghav Budamala, 35 was arrested after fleeing his residence in Orange County, a day after authorities had conducted a search, according to a press release from the Department of Justice.
A criminal complaint filed Thursday charges Budamala with one count of wire fraud.
In 2019, Budamala formed or acquired three shell companies with no operations – Hayventure LLC, Pioneer LLC, and XC International LLC, according to the release. Seven applications filed from April 2020 through March 2021 for pandemic-relief loans under the Paycheck Protection Program and Economic Injury Disaster Loan were allegedly submitted to the Small Business Association by Budamala.
The addresses listed for the companies were bogus, nonexistent or residential.
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,” according to the release.
The SBA and the banks funded six of the seven of the loans and disbursed $5,151,497.
Though Budamala said the funds were spent on payroll expenses, there were no records of those companies paying wages to any employees. 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.
If convicted of the charge, Budamala would face a maximum sentence of 20 years in federal prison.
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