Information — No. 20-CR-261-DSD (Dkt. 43, D. Minn.)

Summary

An Information in United States v. Aditya Raj Sharma, Case No. 20-CR-261-DSD/TNL, in the District of Minnesota, stamped June 3, 2021. Count 1 charges wire fraud under Title 18, United States Code, Section 1343, alleging that from April 2020 through November 2020 Sharma submitted sixteen false and fraudulent applications seeking at least $9,619,046.46 in Paycheck Protection Program loans from ten different lenders and obtained $1,773,600. It says Crosscode Inc. removed Sharma as an officer on or about November 13, 2019, that his 2020 companies Kloudgaze Inc. and Neoforma LLC reported no wages paid, and that Mokume LLC had no active employees beyond him. The charged wire is an April 2020 application for a $562,500 PPP loan. Forfeiture allegations list seized funds including $331,300, $245,138.49 and $12,947.33. It is signed for Acting United States Attorney W. Anders Folk.

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UNITED STATES DISTRICT COURT
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DISTRICT OF MINNESOTA JUN 0 3 2021
Case No. 20-CR-261-DSD/TNL
CLEHK, U.S. DIS-TR|OT CUUR'I
MINNEAPOLIS, MINNESOTA
UNITED STATES OF AMERICA,
INFORMATION
Plaintiff,
18 U.S.C. S 1343
18 u.S.C. S e81(aX1)(C)
V. 28 U.S.C. $ 2a61(c)

ADITYA RAJ SHARMA,

Defendant.

The ACTING UNITED STATES ATTORNEY charses:

General AlleEations

At times material to this Information:

1. From at least in or aboutApril2020 through in or about November 2020,

the defendant, ADITYA RAJ SHARMA, capitalized on the COVID-19 pandemic to

exploit emergency funding for needy, eligible small businesses by knowingly

submitting sixteen false and fraudulent applications to receive loan proceeds

defendant SHARMA knew he was not entitled to receive. Defendant SHARMA used

false and fraudulent pretenses, representations, promises, and concealment of

material facts to apply for at least $9,619,046.46 in such loans from ten different

lenders, of which defendant SHARMA obtained and misappropriated $1,773,600 in

fraud proceeds.

The Defendant and Related Entities

2. Defendant ADITYA RAJ SHARMA was a resident of Maple Grove, in

the State and District of Minnesota.

SCANNED
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JUN 03 2021 t-
U.S. DISTRICT COURT MPLS
3. Crosscode Inc. ("Crosscode") was a cloud-based software development

company registered in Delaware, originally headquartered in Maple Grove,

Minnesota, and subsequently headquartered in Foster City, California. Defendant

SHARMA founded Crosscode in 2015, and thereafter held various positions including

Chief Executive Officer and President. On or about November 13, 2019, defendant

SHARMA was notified that-effective immediatelv-Crosscode's board of directors

had removed him as an officer of Crosscode and terminated his employment for cause.

Defendant SHARMA also knew that he was not the 100% shareholder of Crosscode's

shares.

4. Kloudgaze Inc. ('Kloudgaze") was a company that claimed to design

cloud-computing technology, which defendant SHARMA created and registered in

Delaware on or about May 18, 2020. Defendairt SHARMA was Kloudgaze's president

and chief executive officer.

5. Through at least July 2020, defendant SHARMA did not report the

payment of any wages to a single Kloudgaze employee.

6. At no point did defendant SHARMA's former company, Crosscode, do
business under the name Kloudqaze.

7. Neoforma LLC ("Neoforma") was a company that claimed to engage in

computer systems design and related services, which defendant SHARMA created

and registered in Minnesota on or about July 8, 2020. Neoforma was an apparent

start-up company without any active employees beyond SHARMA as its founder.

I
Through at least August 2020, defendant SHARMA did not report the payment of

any wages to a single Neoforma employee.

8. Mokume LLC ("Mokume") was a company that claimed to develop

computer software, which defendant SHARMA created and registered in Minnesota

on or about JuIy 16, 2020. Defendant SHARMA was Mokume's president and chief

executive officer. Mokume was an apparent start-up company without any active

employees beyond SHARMA as its founder. Through at least August 2020, defendant

SHARMA did not report the payment of any wages to a single Mokume employee.

The U.S. Srnall Business Administration

9. The United States Small Business Administration ("SBA") was an

executive-branch agency of the United States government that provided support to

entrepreneurs and small businesses. The mission of the SBA was to maintain and

strengthen the nation's economy by enabling the establishment and viability of small

businesses and by assisting in the economic recovery of communities after disasters.

10. As part of this effort, the SBA enabled and provided for loans through
banks, credit unions, and other lenders. These loans have government-backed

guarantees.

CARES Act, Paychech Protection Program, and Relief Funding

11. The Coronavirus Aid, Relief, and Economic Security ("CARES") Act was
a federal law enacted in March 2020 and designed to provide emergency financial

assistance to the millions of Americans who are suffering the economic effects caused

by the COVID-19 pandemic. One source of relief provided by the CARES Act was the
authorization of forgivable loans to small businesses for job retention and certain

other expenses, through a program referred to as the Paycheck Protection Program

("PPP").

12. To obtain a PPP loan, a qualifying business was required to submit a
PPP loan application, which was signed by an authorized representative of the

business. The PPP loan application required the business (through its authorized

representative) to acknowledge the program rules and make certain affirmative

certifications in order to be eligible to obtain the PPP loan. In the PPP loan

application (SBA Form 2483), the small business (through its authorized

representative) was required to certifi', among other things: (a) that the small

business was in operation on February 15, 2020; @) average monthly payroll

expenses; and (c) number of employees. These figures were used to calculate the

amount of money the small business was eligible to receive under the PPP. In

addition, businesses applying for a PPP loan were required to provide documentation

showing their payroll expenses.

13. A PPP loan application was processed by a participating lender. If a
PPP loan application was approved, the participating lender funded the PPP loan

using its own monies, which were guaranteed by the SBA. Data from the application,

including the information about the borrower, the total amount of the loan, and the

listed number of employees, was transmitted by the lender to the SBA in the course

of processing the loan.
r4. PPP loan proceeds were required to be used on certain permissible

expenses, including payroll costs, mortgage interest, rent, and utilities. Under the

applicable PPP rules and guidance, the interest and principal on the PPP loan was

eligible for forgiveness if the business spent the loan proceeds on these expense items

within a designated period of time and used a certain portion of the loan towards

payroll expenses.

THE SCHEME TO DEFRAUD

15. From at least April 2020 through at least in or around November 2020,
in the District of Minnesota, and elsewhere, the defendant,

ADITYA RAJ SHARMA.

did knowingly and intentionally devise and execute a scheme and artifice to defraud

and to obtain money by means of materially false and fraudulent pretenses,

representations, and promises, and by concealment of material facts.

16. It was part of the scheme to defraud that from at least in or about April
2020 through at least in or about August 2020, defendant SHARMA knowingly

applied for sixteen PPP loans by submitting knowingly false and fraudulent

applications to numerous lenders. Every application defendant SHARMA submitted

included knowingly false representations and material omissions. The purpose of the

scheme was for defendant SHARMA to unjustly enrich himself by obtaining PPP loan

proceeds under false and fraudulent pretenses, including by submitting fabricated

supporting records, making false statements about the number of employees he had
and the amount of payroll expenses he incurred, and making false statements about

the relevant corporate entities and intended use ofthe loan proceeds.

17. It was further part of the scheme that defendant SHARMA applied for
at least fifteen PPP loans after receiving the proceeds from his first PPP application.

This included one application that defendant SHARMA knowingly submitted in the

name of his spouse without her knowledge or approval. Defendant SHARMA applied

for these additional loans despite PPP requirements, which defendant SHARMA

initialed and certified on every application he submitted, that the applicant "has not

and will not receive another loan under the Paycheck Protection Program" for the

period of February 15, 2020, through December 3I, 2020.

18. More specifically, in furtherance of the scheme, between in or about
April and July 2020, defendant SHARMA submitted three false and misleading PPP

applications-one for Crosscode Inc., dba Kloudgaze; one for Kloudgaze, Inc.; and one

for Mokume, LlC-seeking a total of $1,773,600 in PPP funds. Defendant SHARMA

submitted these applications with numerous knowingly false representations,

examples of which include the following:

Misrepresenting information to qualify under PPP loan requirements,

such as corporate details and dates of incorporation to make it appear

as though defendant SHARMA's entities-Kloudgaze, Neoforma, and

Mokume-had been operational as of February 15, 2020, and thus

potentially eligible for PPP funding when, in fact, these were entities

6
that defendant SHARMA created after the PPP funding was authorized

by law;

Concealing from lenders that SHARMA had previously applied for or

received other PPP funding in order to stave off lenders' inquiries and

to enable defendant SHARMA to unlawfully "double dip" into PPP funds

by receiving a PPP loan for $474,900 for Kloudgaze on July 16, 2020,

and receiving another PPP loan for $736,200 for Mokume on July 26,

2020, even though defendant SHARMA had already received a PPP loan

for $562,500 on April 29,2020;

Falsif ing the number of active employees on payroll and including

knowingly bogus monthly payroll figures to deceive lenders about the

eligibility of defendant SHARMA's businesses; and

Submitting knowingly falsified supporting documentation, such as

forged tax return documents or bogus bank account statements that

defendant SHARMA created.

19. As a direct result of defendant SHARMA'S material falsehoods and

omissions, between April and July 2020,lenders approved these PPP applications

and deposited $1,773,600 in PPP funds into bank accounts that defendant SHARMA

opened and controlled. Thereafter, defendant SI{ARMA transferred this money to

various other bank accounts that he controlled or could access for the purpose of

converting the money to his own purposes.
20. In total, defendant SHARMA submitted thirteen PPP applications that
ultimately were not funded-one for Crosscode, six for Kloudgaze, four for Neoforma,

and two for Mokume. Each of these 13 additional applications contained false

information, fabricated supporting documents, or both. In total, the 13 additional

applications sought $7,845,446.46 in PPP funds.

2I. In total, as a result and in furtherance of his scheme to defraud,
defendant SIIARMA received approximately $1,773,600 in fraud proceeds, some of

which he distributed and misappropriated, or attempted to distribute and
misappropriate, for the personal benefit of himself and other parties in violation of

PPP requirements. Rather than use PPP funds for permissible business expenses,

defendant SHARMA instead transferred at least $900,000 to personal bank accounts

that he controlled arid for his personal use. More specifically, defendant SHARMA

used his fraud proceeds to: (a) cover approximately $260,226 in unrelated legal debts;

(b) pay for home improvements including the installation of a $64,300 pool in

defendant SHARMA's backyard and landscaping projects totaling $24,600; (c)

transfer approximately $14,000 to a financial account in India; and (d) otherwise

finance new business ventures using PPP funds.

COUNT 1
(Wire Fraud)

22. Paragraphs 1 through 2L arc incorporated by reference as if fully set
forth herein.

23. On or about the date set forth below. in the State and District of
Minnesota and elsewhere, the defendant,
ADITYA RAJ SHARMA,

for the purpose of executing and attempting to execute the above-described scheme

and artifice to defraud, knowingly transmitted and caused to be transmitted by

means of wire communications in interstate and foreign commerce, certain writings,

signs, signals, and sounds, as described below:

Date ofW,ire
Cotrnt (on or ahout); W:i.re
Electronic submission by defendant from
I April 26,2020 Minnesota of an application for a $562,500 PPP
loan, which was routed interstate throueh servers
located outside of Minnesota.

AII in violation of Title 18, United States Code, Section 1343.

FORFEITURE ALLEGATIONS

25. Count 1 of this Information is incorporated by reference for the purpose
of alleging forfeiture pursuant to Title 18, United States Code, Section 981(a)(1)(C),

in conjunction with Title 28, United States Code, Section zaGI@).

26. Upon conviction of any of the offenses alleged in Count 1, as set forth in
this Information, defendant shall forfeit to the United States of America any
property, real or personal, which constitutes or is derived from proceeds traceable to

the violation, as provided in Title 18, United States Code, Section 981(a)(1)(C) and

Title 28, United States Code, Section 246L(c), including but not limited to:

$331,300 in funds seized from Old National Bank account
x1176 in the name of Mokume,LLC;

$245,138.49 in fund.s seized from.Wells Fargo Bank
account x8780 in the name of Kloudgaze,Inc.;

9
$85.594.94 in funds seized from Old National Bank account
x6720 in the name of Kloudgaze, Inc.; and

d. $12,947.33 in funds seized from US Bank account x6963 in
the name of defendant SHARMA.

27. If any of the above-described forfeitable property is unavailable for
forfeiture, the United States intends to seek the forfeiture of substitute property as

provided for in Title 21, United States Code, Section 853b), as incorporated by Title

28, United States Code, Section 246I(c).

Dated: June 7,202I W. ANDERS FOLK
Acting United States Attorney

MATTHEW S. EBERT
Assistant United States Attorney
Attorney ID No. 0386655
JORDAN L. SING
Assistant United States Attorney
Attorney ID No. 0393084

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