IRVINE, Calif.—A 35-year-old Orange County man, who is accused of fraudulently obtaining more than $5 million in COVID-19 relief loans on sham companies, agreed to plead guilty to federal criminal charges, a U.S. attorney said in a June 3 statement.
Raghavender Reddy Budamala, of Irvine, confessed to one count of bank fraud and one count of money laundering he allegedly used on stock trading, immigrant investment programs, and real estate assets.
Budamala allegedly used the money to pay for personal expenses, including purchasing a $1.2 million investment property in Eagle Rock, a $600,000 property in Malibu, and a private residence in Irvine, according to the statement.
The U.S. attorney’s office also accused Budamala of depositing nearly $3 million of the pandemic-era relief loans into his stock trading account and investing $970,000 in what’s called an EB-5 Immigrant Investor Visa Program, which allows foreign investors to obtain permanent residency if they meet specific capital investment and job creation requirements.
Before the outbreak of the COVID-19 pandemic in 2019, Budamala formed or acquired three non-operational shell companies—Hayventure LLC, Pioneer LLC, and XC International LLC, according to the U.S. attorney’s office.
From April 2020 through March 2021, “Budamala submitted to the Small Business Administration seven applications for pandemic-relief loans under the Paycheck Protection Program and Economic Injury Disaster Loan,” the statement reads.
The Small Business Administration funded six of those loans, disbursing about $5.2 million the statement reads.
Budamala allegedly claimed his companies—all of which had “bogus, nonexistent, or residential” addresses—earned millions in revenue, according to the statement.
He allegedly said he needed the money to pay out dozens of employees and use it for business operations.
“No records of those companies paying wages to any employees, and bank records for the companies reflect no significant business income or operating expenses,” the statement reads.
Once he received the funds, Budamala allegedly applied to have several of the loans forgiven, claiming he used the money “entirely for payroll,” and agreed to forfeit the “ill-gotten” gains to the government.
Authorities arrested Budamala on Feb. 23 after thwarting his attempt to flee the United States and escape to Mexico at the San Ysidro port of entry.
Budamala, who has been in federal custody since February, is scheduled to enter his guilty plea on June 21 and will face a maximum sentence of 40 years in federal prison.
