A Southern California man was sentenced Monday to four years in federal prison for fraudulently obtaining more than $5 million in COVID-relief loans for three shell companies, prosecutors said.
Raghavender Reddy Budamala, who was arrested in February while trying to cross the border into Mexico, was also ordered to pay $5.15 million in restitution, the U.S. Attorney’s Office said in a statement.
Budamala, 36, pleaded guilty in June to one count of bank fraud and one count of money laundering. As part of his plea agreement, the Irvine resident agreed to forfeit real estate in Orange and Los Angeles counties, as well as approximately $4.1 million in funds from bank and investment accounts and in cryptocurrency, the statement said..
Following the outbreak of the COVID-19 pandemic, Budamala submitted seven applications for pandemic-relief loans for three shell companies with no operations, prosecutors said. Budamala falsely represented 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, according to court papers.
The addresses listed for the companies were bogus, nonexistent or residential, prosecutors said.
He used the money to buy three homes, including a $1.2 million home in Los Angeles and a property in Malibu worth nearly $600,000, court documents said.
Submitted by Associated Press