Government's Sentencing Position Regarding Raghavender Reddy Budamala (Document 41)

Summary

Government's Sentencing Position Regarding Raghavender Reddy Budamala, filed September 6, 2022 as Document 41 in No. CR 22-77-ODW. The government says he pled guilty on June 21, 2022, under an agreement, to bank fraud and transactional money laundering counts, and recommends 57 months in prison, three years of supervised release and $5,151,497 in restitution to the SBA. It describes PPP and EIDL loan applications made for shell companies with no operations and says the loan money funded personal purchases and investments. It puts the Guidelines range at 57 to 71 months and argues for a low-end sentence given his lack of criminal history and his plea and surrender of assets.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

     Case 2:22-cr-00077-ODW Document 41 Filed 09/06/22 Page 1 of 5 Page ID #:251



1    STEPHANIE S. CHRISTENSEN
     Acting United States Attorney
2    SCOTT M. GARRINGER
     United States Attorney
3    Chief, Criminal Division
     GREGORY BERNSTEIN (Cal. Bar No. 299204)
4    Major Frauds Section
          1100 United States Courthouse
5         312 North Spring Street
          Los Angeles, California
6         Telephone: 213-894-3183
          Email:     Gregory.Bernstein@usdoj.gov
7
     Attorneys for Plaintiff
8    UNITED STATES OF AMERICA

9                           UNITED STATES DISTRICT COURT
10                     FOR THE CENTRAL DISTRICT OF CALIFORNIA
11   UNITED STATES OF AMERICA,               No. CR 22-77-ODW

12             Plaintiff,                    GOVERNMENT’S SENTENCING POSITION
                                             REGARDING RAGHAVENDER REDDY
13                   v.                      BUDAMALA

14   RAGHAVENDER REDDY BUDAMALA,

15             Defendant.

16

17        I.    Introduction
18        On June 21, 2022, defendant Raghavender Reddy Budamala
19   (“Budamala”) pled guilty pursuant to an agreement to Counts 1 and 10
20   of the indictment, which charged the defendant with 18 U.S.C. §§
21   1344(2) (bank fraud) and 1957 (transactional money laundering).
22        For the reasons that follow, the government recommends that the
23   Court sentence Budamala to 57 months in prison and three years of
24   supervised release. The government also requests that the Court order
25   Budamala to pay $5,151,497 in restitution to the Small Business
26   Administration (“SBA”).
27

28
     Case 2:22-cr-00077-ODW Document 41 Filed 09/06/22 Page 2 of 5 Page ID #:252



1         II.   Background 1

2         The facts of this case are relatively simple. Between January

3    and August 2019, Budamala formed and acquired Hayventure LLC

4    (“Hayventure”), Pioneer LLC (“Pioneer”), and XC International LLC

5    (“XC International”), three companies with no business operations.

6         Following the outbreak of Covid-19, Budamala submitted to the

7    SBA seven PPP and EIDL loan applications on behalf of those

8    companies. Budamala represented to the administrating banks that his

9    companies employed dozens of individuals and earned millions of
10   dollars in revenue, and that he needed the money for payroll and
11   business expenses. The SBA and its administrating banks funded six of
12   the loans and disbursed $5,151,497 to Budamala’s companies. Budamala
13   applied to have several of the loans forgiven and represented that he
14   used the SBA money entirely for payroll.
15        The loan applications were false. The listed addresses for the
16   companies were bogus, nonexistent, or residential. Though Budamala
17   submitted IRS Forms 941 for each of his companies, the IRS had no
18   records for Hayventure, Pioneer, or XC International. The states

19   where Budamala’s companies purportedly operated had no records of

20   those companies paying wages to any employees. Bank records for the

21   companies reflected no significant business income or operating

22   expenses. And in February 2021, Budamala told a special agent from

23   the State Department that he wanted a passport because he thought it

24   would help him get a job.

25        Once the loans were funded, Budamala used the money for personal

26   expenditures. For instance, Budamala used almost all of loan proceeds

27

28        1 The offense conduct is described in paragraphs 13 to 44 of the
     Presentence Report (“PSR”) and paragraph 14 of the plea agreement.
                                      2
     Case 2:22-cr-00077-ODW Document 41 Filed 09/06/22 Page 3 of 5 Page ID #:253



1    to fund the purchase of a property in Los Angeles, the purchase of a

2    property in Malibu, an investment in an EB-5 fund, a private

3    placement investment, and the purchase of a residence in Irvine, and

4    to fund a nearly $3 million investment in his personal TD Ameritrade

5    account. The government is aware of no evidence that Budamala used

6    any of the SBA’s money for payroll.

7         IV.   Sentencing Guidelines Calculation

8         The government and probation officer believe that the Court

9    should calculate the guidelines as follows:
10        Base offense level:                 27   2S1.1(a)(1), 2B1.1(a)(1),
                                                   (b)(1)(J), (b)(17)(A)
11
          Money laundering:                   +1   2S1.1(b)(2)(A)
12

13        Acceptance of responsibility: -3         3E1.1

14        Adjusted offense level:             25

15   Plea agreement ¶ 16; PSR ¶¶ 51-66. Budamala appears to be in Criminal

16   History Category I. His guideline range is 57 to 71 months in prison.

17        IV.   Section 3553(a) Factors

18        In addition to the advisory guideline range, the Court should

19   base its judgment on the Section 3553(a) factors and impose a

20   sentence that is sufficient but not greater than necessary to reflect

21   the seriousness of the offense, promote respect for the law, provide

22   just punishment, afford adequate deterrence, and protect the

23   community. Gall v. United States, 552 U.S. 38, 49 (2007); United

24   States v. Carty, 520 F.3d 984, 987 (9th Cir. 2008); 18 U.S.C. § 3353.

25   The Section 3553(a) factors include, among other things, the nature

26   and circumstances of the offense, the history and characteristics of

27   the accused, the need to promote the enumerated goals of sentencing,

28   and the need to avoid unwarranted disparities. Id.

                                          3
     Case 2:22-cr-00077-ODW Document 41 Filed 09/06/22 Page 4 of 5 Page ID #:254



1         This case is somewhat confounding. Budamala has no meaningful

2    criminal history, PSR ¶ 71, and from what the government knows, never

3    committed fraud before the events of this case. To the contrary,

4    Budamala appears to be an intelligent person from a stable

5    background. His father was a restaurant manager, his mother was a

6    teacher, and his sister works in IT. PSR ¶¶ 78-79. Budamala has

7    degrees in technology and computer science, and described his

8    upbringing as “middle class.” PSR ¶¶ 80, 95-96. And out of nowhere,

9    Budamala submitted seven fraudulent loan applications and stole more
10   than $5 million from the SBA. On the one hand, Budamala committed a
11   crime (PPP and EIDL fraud) that calls for deterrence. On the other,
12   Budamala is in a good position to lead a productive life once he’s
13   released from prison and returned to his home country.
14        Several other facts militate in favor of a low-end sentence.
15   Budamala appears to suffer from a number of physical and mental
16   health conditions, including seizures, anxiety, depression, and mild
17   psychosis. PSR ¶¶ 85-92. Moreover, once he completes the custodial
18   portion of his sentence, Budamala will be deported to India, which

19   will make it difficult for him to “have regular contact with his

20   son.” PSR ¶ 83. And of significance to the government, once indicted,

21   to help undo the harm he caused the SBA, Budamala worked diligently

22   through counsel to resolve this case with a plea agreement and

23   surrender his assets to the government. Under the circumstances, a

24   low-end sentence is appropriate.

25        V.    Restitution

26        In the plea agreement, Budamala agreed that he caused an actual

27   loss to the SBA of $5,151,497 and that he would pay restitution to

28   the SBA. Plea Agreement ¶ 10; 18 U.S.C. § 3663A(b)(1) and (c)(1)

                                          4
     Case 2:22-cr-00077-ODW Document 41 Filed 09/06/22 Page 5 of 5 Page ID #:255



1    (providing for mandatory restitution to victims of property crimes in

2    the amount of actual losses, including victims of any crime committed

3    “by fraud or deceit”); United States v. Kovall, 857 F.3d 1060, 1064

4    (9th Cir. 2017) (MVRA requires court to order restitution for “any

5    offense committed by fraud or deceit”). The government therefore

6    requests that the Court order $5,151,497 in restitution to the SBA.

7         VI.   Conclusion

8         The government recommends that Budamala be sentenced to 57

9    months in prison and three years of supervised release. The
10   government also requests that the Court order Budamala to pay
11   $5,151,497 in restitution to the SBA.
12   Dated: September 6, 2022             Respectfully submitted,

13                                        STEPHANIE S. CHRISTENSEN
                                          Acting United States Attorney
14
                                          SCOTT M. GARRINGER
15                                        Assistant United States Attorney
                                          Chief, Criminal Division
16
                                          /s/ Gregory Bernstein
17                                        GREGORY BERNSTEIN
                                          Assistant United States Attorney
18

19

20

21

22

23

24

25

26

27

28

                                          5


File and source

File

41.pdf

Size

147,215 bytes

SHA-256

39e14c159f52e48ff2abf844b31fb750477ff8d890601d79a662e82fcb34f150

Our copy

41.pdf

Original

No public link identified.