EB-5 Investor Snagged in $5 Million COVID Relief Scam

Another day, another EB-5 boondoggle.

A fleeing foreign national was arrested last week at the U.S.-Mexico border and charged with bilking more than $5 million in COVID relief funds for sham companies. Among Reddy Raghav Budamala’s dubious transactions was a six-figure “investment” into the EB-5 cash-for-visas program.

Though the Department of Justice (DOJ) and news reports referred to Budamala an “Irvine man,” he is, in fact, an Indian national. According to the DOJ, Budamala in 2019 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, the 35-year-old Budamala filed seven applications for financial assistance under the Paycheck Protection Program and an Economic Injury Disaster Loan.

Addresses for Budamala’s companies were bogus or nonexistent. He used the COVID relief funds for a $1.2 million investment property in Los Angeles, a $597,585 property in Malibu, a $3 million deposit into his personal TD Ameritrade account and a $970,000 investment in the EB-5 Immigrant Investor Visa Program.

DOJ did not disclose details of the EB-5 venture, but the fraud-ridden program — intended to leverage foreign investment into American-based job-creating projects — has produced a succession of schemes that resulted in no jobs. EB-5 has, however, generated lots of visas for foreign nationals and enriched private regional centers that hold the funds.

While the government’s criminal investigation was under way, Budamala’s application for a U.S. passport was denied last year. A conviction will extend his stay in this country, with up to 20 years in federal prison. So at least this EB-5 entrepreneur has that going for him.

"Bob Dane : ."