LOS ANGELES (CNS) – An Orange County man accused of fraudulently obtaining more than $5 million in COVID-19 relief loans for three shell companies, but used the money to buy a house in Malibu and other personal expenses was in federal custody today.
Reddy Raghav Budamala, 35, of Irvine, was arrested early Thursday at the US-Mexico border by federal law enforcement and made his first appearance that day in federal court in Los Angeles, where he was held without bail because he posed a robbery risk, according to the U.S. Attorney’s Office.
A criminal complaint filed Thursday charges Budamala with one count of wire fraud, which carries a maximum sentence of 20 years in federal prison.
According to an affidavit filed with the complaint, Budamala formed or acquired three shell companies in 2019 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 deal with the resulting economic fallout, Budamala reportedly submitted to the Small Business Administration seven applications for pandemic relief loans in under the Paycheck Protection Program and the Economic Disaster Loan.
In the demands, Budamala falsely told banks administering pandemic relief business loan programs that his businesses employed dozens of people and earned millions of dollars in revenue, and that he needed the money. for salaries and business expenses, according to the affidavit.
Addresses listed for businesses were fake, non-existent, or residential.
The SBA and the banks funded six of the loans and disbursed more than $5.15 million, the affidavit says. Budamala allegedly requested the cancellation of several of the loans and falsely stated that he had used all of the SBA money for payroll.
Once the loans were funded, Budamala used the money to pay for his personal expenses, including buying a $1.2 million investment property in Los Angeles, buying a $597,585 property in Malibu, a $970,000 investment in an EB-5 immigrant investor visa program. and a nearly $3 million deposit in Budamala’s TD Ameritrade personal account, according to the affidavit.