IRVINE, Calif. — A 35-year-old Orange County man accused of fraudulently obtaining more than $5 million in COVID-19 relief loans from shell companies has agreed to plead guilty, to receive federal criminal charges, a U.S. attorney said in a June 3 statement.
Raghavender Reddy Budamala of Irvine has confessed to one count of bank fraud and one count of money laundering, which he allegedly used for stock trading, immigrant investment programs and real estate assets.
Budamala allegedly used the money to pay for personal expenses, including buying a $1.2 million investment property in Eagle Rock, a $600,000 property in Malibu and a private residence in Irvine, according to the report the explanation.
U.S. prosecutors also accused Budamala of depositing nearly $3 million of the pandemic-era relief loans into its stock trading account and investing $970,000 in a so-called EB-5 visa program for immigrant investors, which allows foreign investors to obtain a visa to obtain permanent residency if they meet certain capital investment and job creation requirements.
Prior to the outbreak of the COVID-19 pandemic in 2019, Budamala formed or acquired three non-operating shell companies – Hayventure LLC, Pioneer LLC and XC International LLC, according to US Attorneys.
From April 2020 to March 2021, Budamala “submitted seven applications to the Small Business Administration for pandemic relief loans under the Paycheck Protection Program and the Economic Injury Disaster Loan,” the statement said.
The Small Business Administration funded six of those loans and disbursed about $5.2 million, the statement said.
Budamala allegedly claimed that its companies – all of which had “fake, non-existent or private” addresses – reportedly generated millions in revenue.
He allegedly said he needed the money to payroll dozens of employees and do business.
“No record of these companies paying wages to employees and bank records for the companies do not reflect material business income or operating expenses,” the statement said.
After receiving the funds, Budamala allegedly applied for forgiveness of several of the loans, claiming he used the money “entirely on payroll” and agreed to forfeit the “ill-gotten gains” to the government.
Authorities arrested Budamala on February 23 after foiling his attempt to flee the United States and flee to Mexico at the San Ysidro port of entry.
Budamala, who has been in federal custody since February, is scheduled to plead guilty on June 21 and faces a maximum sentence of 40 years in federal prison.