Indian-Origin man charged in US for fraudulently seeking $10 mn from COVID-19 relief fund

An Indian origin man in the US has been booked for fraudulently seeking more than USD 10 million in loans under a coronavirus relief programme set up to help small scale businesses, according to the reports. Shashank Rai, 30, allegedly sought millions of dollars in forgivable loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. He reportedly claimed to have 250 employees earning wages but it was found that no employee worked for his alleged business. 

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Fraudulent statements

According to the international media reports, Rai resides in Texas and is allegedly charged with violations of wire fraud, bank fraud, false statements to a financial institution, and false statements to the SBA.  Assistant Attorney General Brian Benczkowski of the Justice Department's Criminal Division reportedly said that Rai fraudulently pursued millions of dollars in loans intended for legitimate small businesses suffering the economic hardships of the COVID-19 pandemic. As per the reports, Rai made two fraudulent claims to two different lenders to seek loans guaranteed by the SBA for COVID-19 relief through the Paycheck Protection Program (PPP). Rai submitted an application to the first lender in which he sought USD 10 million in PPP loan proceeds and falsely claimed to have 250 employees with an average monthly payroll of USD 4 million. 

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Similarly, in another application he claimed USD 3 million in PPP loan proceeds by fraudulently claiming to have 250 employees with an average monthly payroll of approximately USD 1.2 million. According to the reports, the Texas Workforce Commission provided information to the investigators that  Mr Rai Family LLC reported no revenues for the fourth quarter of 2019 or the first quarter of 2020. In addition, the investigators recovered some materials from the trash outside of Mr Rai's residence which included handwritten notes that appear to reflect an investment strategy for the USD 3 million, which is same as the amount he sought from the second lender. 

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READ: US: 2 Businessmen Charged With Fraudulently Seeking Pandemic Relief Loans
Image Credit: AP