Raghavender Reddy Budamala, COVID-19 Relief Loan Scam, California 2023

LOS ANGELES — Raghavender Reddy Budamala, 36, of Irvine, California, was sentenced to 48 months in federal prison for fraudulently obtaining more than $5 million in COVID-relief loans for three shell companies.

On February 23, when Budamala attempted to abscond from the United States to Mexico via the San Ysidro border crossing, he was arrested and has been in federal custody since then. A criminal complaint was filed against him on February 24.

Budamala pleaded guilty on June 21 to one count of bank fraud and one count of money laundering. As part of his plea agreement, Budamala agreed to forfeit real estate in Orange County, Malibu and Los Angeles, as well as approximately $4,119,662 in funds from bank and investment accounts and cryptocurrency.

From January 2019 to August 2019, Budamala 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 resulting economic fallout, Budamala submitted to the Small Business Administration seven applications for pandemic-relief loans under the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program.

As part of the applications filed from April 2020 through March 2021, Budamala falsely represented to the banks administering the COVID-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.

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 Eagle Rock, the purchase of a $597,585 property in Malibu, the purchase of a personal residence in Irvine, 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.

Budamala was also ordered to pay $5,151,497 in restitution. The SBA and the banks funded six of the loans and disbursed a total of $5,151,497. Budamala applied to have several of the loans forgiven and falsely represented that he had used the SBA money entirely for payroll.

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