LOS ANGELES — An Irvine man has agreed to plead guilty to federal bank fraud and money laundering charges after prosecutors say he pocketed more than $5 million in COVID-19 relief loans intended for small businesses, according to the U.S. Department of Justice.
Raghavender Reddy Budamala, 35, submitted seven fraudulent loan applications to the Small Business Administration between April 2020 and March 2021, falsely claiming his three shell companies employed dozens of workers and generated millions in revenue. None of it was true. The companies — Hayventure LLC, Pioneer LLC, and XC International LLC — had no employees, no real business addresses, and no operating history.
Budamala spent the money on himself. According to court documents, he used the funds to purchase a $1.2 million investment property in Eagle Rock, a $597,585 property in Malibu, and a personal residence in Irvine. He also invested $970,000 in an EB-5 Immigrant Investor Visa program and deposited nearly $3 million into his personal TD Ameritrade account.
He was arrested on February 23 after attempting to flee to Mexico through the San Ysidro border crossing. He has been in federal custody since.
The Attorney General launched the COVID-19 Fraud Enforcement Task Force in May 2021 to coordinate DOJ resources across federal agencies, investigate and prosecute pandemic-related fraud, and help relief program administrators prevent future abuse.
Federal watchdogs now estimate that well over $300 billion in federal COVID‑19 relief funds were lost to fraud or “potentially fraudulent” payments, concentrated in three major areas: SBA’s Paycheck Protection Program and Economic Injury Disaster Loan programs, where the SBA Inspector General found more than $200 billion in potentially fraudulent loans (about 17% of all PPP/EIDL dollars), and pandemic unemployment insurance, where congressional and GAO analyses put fraudulent claims at roughly $191 billion. These are statistical fraud‑rate estimates derived from audits and data analytics, so they are far larger than the amounts seen in court cases.
On the enforcement side, the Justice Department’s COVID‑19 Fraud Enforcement Task Force reports over 3,500 defendants charged, more than 400 civil settlements and judgments, and about $1.4 billion in seized or forfeited funds, plus over $2 billion in alleged losses tied to these prosecutions—tiny fractions of the broader estimated fraud totals. In other words, while only a few billion dollars have been clawed back so far, the best available official estimates suggest that total COVID‑19 relief fraud runs into the low‑to‑mid hundreds of billions of dollars, making it one of the largest fraud events in U.S. government spending history.
The full DOJ press release is available here.
