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California man arrested for obtaining COVID relief loans for shell companies

A California man who fled after authorities raided his residence last week has been arrested at the US-Mexico border and charged with fraudulently obtaining more than $5 million in COVID relief loans for three shell companies. Reddy Raghav Budamala, 35, of Irvine, was arrested on February 25, a Justice Department says Press release.

Later that afternoon, Budamala made his first appearance in United States District Court in Los Angeles. At that hearing, a United States magistrate ordered Budamala to be held without bail because he was a flight risk. He is charged with one count of wire fraud.

The DOJ press release, citing an affidavit filed with the complaint, says that in 2019, Budamala formed or acquired three shell companies with no operations – Hayventure LLC, Pioneer LLC and XC International LLC. He then reportedly submitted seven applications to the Small Business Administration for pandemic relief loans under the Paycheck Protection Program (PPP) and Economic Disaster Loan (EIDL).

These applications were filed from April 2020 to March 2021, the DoJ said, adding that Budamala “falsely told banks administering the COVID relief business loan programs that his businesses employed dozens of people and earned millions of dollars. dollars of income, and that he needed money for salaries and business expenses.The addresses listed for businesses were fake, non-existent, or residential.

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During a February 2021 interview with a State Department official in an unsuccessful attempt to obtain a US passport, Budamala said he wanted the passport so he could get a job, according to the affidavit.

The SBA and the banks funded six of the loans and disbursed $5,151,497, 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, he used the money to pay for his personal expenses, including the purchase of 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 an investment of nearly $3 million in Deposit in his TD Ameritrade personal account.