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LOS ANGELES (CNS) - An Orange County man charged with fraudulently obtaining more than $5 million in COVID-19 relief loans for three sham companies but who used the money to purchase a home in Malibu and other personal expenses was in federal custody today.
Reddy Raghav Budamala, 35, of Irvine, was arrested at the United States-Mexico border early Thursday by federal law enforcement and made his initial court appearance that day in Los Angeles federal court, where he was ordered held without bond because he posed a flight 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 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 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.
In the applications, Budamala falsely represented to the banks administering the pandemic 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 SBA and the banks funded six of the loans and disbursed more than $5.15 million, 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, according to the affidavit.