- Shashank Rai, 30, of Beaumont, Texas, sought more than $10 million in forgivable loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
A Texas engineer has pleaded guilty for filing fraudulent bank loan applications under a coronavirus relief plan. According to a Department of Justice press release, Shashank Rai, 30, of Beaumont sought more than $10 million in forgivable loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. He was charged in May 2020 with violations of wire fraud, bank fraud, false statements to a financial institution, and false statements to the SBA.
As part of his guilty plea, Rai admitted that he sought millions of dollars in forgivable loans guaranteed by the SBA from two different banks, the press release said. He made two fraudulent claims to two different lenders for loans guaranteed by the SBA for COVID-19 relief through the Paycheck Protection Program (PPP).
“In the application submitted to the first lender, Rai sought $10 million in PPP loan proceeds by fraudulently claiming to have 250 employees with an average monthly payroll of $4 million,” the press release said. “In the second application, Rai sought approximately $3 million in PPP loan proceeds by fraudulently claiming to have 250 employees with an average monthly payroll of approximately $1.2 million.”
According to court documents, the Texas Workforce Commission provided information to investigators of having no records of employee wages having been paid in 2020 by Rai or his purported business, Rai Family LLC. In addition, the Texas Comptroller’s Office of Public Accounts reported to investigators that Rai Family LLC reported no revenues for the fourth quarter of 2019 or the first quarter of 2020.
According to court documents, materials recovered from the trash outside of Rai’s residence included handwritten notes that appear to reflect an investment strategy for the $3 million, which is the amount of money that Rai allegedly sought from the second lender.
“The Payroll Protection Programe was designed to help struggling businesses and hard working Americans, not individuals who concoct imaginary businesses and employees,” said Acting U.S. Attorney Nicholas J Ganjei. “We will continue to work diligently with our law enforcement partners to investigate and prosecute those who exploit this critical, taxpayer-funded program.”