Former Schenectady Nightclub Owners Admit Defrauding COVID-19 Relief Programs

Summary

A release of 2023-07-19 states that Deborah Budhraj and Adesh Budhraj, who co-owned a restaurant, bar and nightclub in Schenectady, New York, pled guilty to conspiring to defraud loan programs meant for businesses struggling with the financial effects of the coronavirus pandemic. United States Attorney Carla B. Freedman and Janeen DiGuiseppi, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI), made the announcement. The release states that the loans sought were two Paycheck Protection Program (PPP) loans and one Economic Injury Disaster Loan (EIDL), totaling $558,514. It states that each pled guilty to bank fraud conspiracy and wire fraud conspiracy, faces sentencing on November 16, 2023, and agreed to pay $558,514 in restitution to the SBA.

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ALBANY, NEW YORK – Deborah Budhraj, age 52, and her husband Adesh Budhraj, age 53, of Ballston Lake, New York, pled guilty today to conspiring with each other to defraud loan programs meant for businesses struggling with the financial effects of the coronavirus pandemic.
United States Attorney Carla B. Freedman and Janeen DiGuiseppi, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI), made the announcement.
Deborah and Adesh Budhraj had co-owned a combination restaurant, bar and nightclub in Schenectady, New York (called “Establishment A” in court documents).  In February 2020, they contractually agreed to sell this business to another couple (“Couple A”), and received most of the purchase money – $265,720 – from Couple A the following month.  Although the sale was not finalized until August 2021, Couple A became the managers of Establishment A as of about March 2020, and assumed day-to-day responsibility for its payroll and other ordinary expenses, such as lease and utilities payments.
In pleading guilty, Deborah and Adesh Budhraj admitted that without Couple A’s knowledge, they applied for two Paycheck Protection Program (PPP) loans issued by banks and one Economic Injury Disaster Loan (EIDL) issued by the U.S. Small Business Administration (SBA), between April 2020 and June 2021; the loans totaled $558,514 and were meant to support Establishment A and its employees during the pandemic.
Deborah and Adesh Budhraj each admitted that they never intended to use the loans for Establishment A’s expenses, and to instead using the loaned funds for impermissible purposes, including on real estate transactions and personal expenses.  Deborah also fraudulently obtained forgiveness of the two PPP loans by falsely certifying that the loaned funds were spent in accordance with PPP rules, including on payroll.
Deborah and Adesh Budhraj each pled guilty to bank fraud conspiracy and to wire fraud conspiracy.  They face up to 30 years in prison for bank fraud conspiracy, and up to 20 years in prison for wire fraud conspiracy, when they are sentenced on November 16, 2023 by Senior United States District Judge Lawrence E. Kahn.  A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.  Each defendant has also agreed to pay $558,514 in restitution to the SBA, and to forfeit that same amount as proceeds of their crimes.
The FBI investigated this case, and Assistant U.S. Attorney Michael Barnett is prosecuting this case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit
https://www.justice.gov/coronavirus
.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at:
https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form
.

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