Kishore Kethineni, Bank and Tax Evasion, California 2023

Kishore Kethineni, the CEO of multiple software development and IT services companies in the Bay Area, was sentenced to two years in prison for his role in a conspiracy to commit bank fraud and for his failure to pay over more than $2 million in employment taxes.

SAN JOSE – On February 15, 2023, Kethineni was charged by Superseding Information with one count of failure to pay over employment tax in violation of 26 U.S.C. § 7202 and one count of conspiracy to commit bank fraud in violation of 18 U.S.C. § 1349.

Kethineni pleaded guilty to both counts on February 21, 2023. He admitted that he conspired with his two brothers to engage in a scheme in which they fraudulently obtained over $3.1 million in loans under the Paycheck Protection Program (PPP).

The PPP is a COVID-19 pandemic relief program administered by the Small Business Administration (SBA) that provided forgivable loans through third-party lenders to small businesses for payroll and certain other expenses.

Kethineni was the sole owner and CEO of four of the companies involved in the scheme: BiteGate, Inc., Dinenamics, Inc., Neelinfo, Inc., and TechPMC, Inc.

His brothers were the owners of the three other companies involved: Boxstertech, Inc., Hiretechforce, Inc., and TechGlobalSystems, Inc.

In addition to the prison term, Judge Edward J. Davila also ordered Kethineni to serve two years of supervised release—to begin after the prison term—to pay $3,295,514.25 in restitution. Kethineni will also pay over more than $2 million in employment taxes that his company, Neelinfo, Inc., had withheld from the pay of its employees.

Kethineni redirected significant amounts of the PPP loan funds to himself and his family members instead of using the funds for payroll and other authorized business expenses under the program.

The sentence was handed down by the Hon. Edward J. Davila, United States District Judge. Kethineni is from Dublin, Calif.

Kethineni, of Dublin, Calif., pleaded guilty to the charges on February 21, 2023. In pleading guilty, Kethineni admitted that he conspired with his two brothers to engage in a scheme in which they fraudulently obtained over $3.1 million in loans under the Paycheck Protection Program (PPP).

Collectively, Kethineni and his brothers submitted at least twelve PPP loan applications on behalf of their seven companies. The applications sometimes were virtually identical. The applications resulted in the approval and funding of nine loans totaling over $3.1 million in PPP funds.

Related Federal Cases