Maple Grove man sentenced to five years in prison for $9.6 million scheme to defraud COVID-19 Paycheck Protection Program | USAO-MN
MINNEAPOLIS — A Maple Grove man was sentenced to 60 months in prison followed by two years of supervised release for fraudulently requesting $9,619,046.46 from the U.S. Small Business Administration‘s Paycheck Protection Program, which he fraudulently obtained and misappropriated more than $1.7 million. Acting U.S. Attorney Charles J. Kovats made the announcement after Senior U.S. District Judge David S. Doty convicted the defendant.
According to court documents, Aditya Raj Sharma, 47, was the founder, CEO and president of Crosscode Inc., a cloud-based software development company originally headquartered in Maple Grove, Minnesota. In November 2019, Sharma was removed from his executive position and fired from the company by Crosscode’s board of directors. Between May 2020 and July 2020, Sharma established three separate technology companies, Kloudgaze Inc., Neoforma LLC, and Mokume LLC.
From April 2020 to August 2020, Sharma applied for 16 loans from ten different lenders for a total of $9,619,046.46 through the US Small Business Administration’s Paycheck Protection Program (“PPP”) by submitting false and fraudulent claims under the names of its various technology companies. As part of his fraudulent scheme, Sharma submitted fabricated vouchers, made false statements about the number of employees he had and the amount of salary expenses he incurred, and made false statements about the corporate entities involved and the intended use of the loan proceeds. Sharma also applied for one of his fraudulent loans in his wife’s name without her knowledge or approval.
Additionally, on April 26, 2020, Sharma submitted an application on behalf of “Crosscode dba Kloudgaze” seeking a $562,500 PPP loan. On the app, Sharma falsely stated that “Crosscode dba Kloudgaze” was in use on February 15, 2020, even though Sharma only created Kloudgaze in May 2020. Additionally, Sharma falsely stated that he was the owner 100% and CEO of Crosscode, that Crosscode did business as Kloudgaze, and that “Crosscode dba Kloudgaze” had approximately 29 employees on its payroll, even though Minnesota state records show Sharma does not paid no salary to a single Kloudgaze employee. In support of the claim, Sharma included fraudulent supporting documents, including fabricated bank account statements.
As a result of Sharma’s fraudulent scheme, lenders approved three of his PPP applications and deposited $1,773,600 in PPP funds into bank accounts controlled by Sharma. Rather than using the funds for allowable business expenses, Sharma used the money to pay off unrelated legal debts, fund new business ventures, transfer approximately $14,000 to a financial account in India, and pay for home improvements, including landscaping and installation of a $64,300. backyard swimming pool at his residence.
On July 8, 2021, Sharma pleaded guilty to one count of wire fraud.
During the investigation, law enforcement seized approximately $674,980.76 worth of fraudulent proceeds held in multiple bank accounts controlled by Sharma. The funds seized will be forfeited to the United States and Sharma has been ordered to pay $1,773,600 in restitution.
This case is the result of an investigation by the FBI.
Assistant U.S. Attorneys Matthew S. Ebert, Jordan L. Sing, Quinn Hochhalter, and Craig R. Baune prosecuted the case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to mobilize Department of Justice resources in partnership with government agencies to scale up enforcement and prevention efforts. pandemic-related fraud. The task force strengthens efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies administering relief programs to prevent fraud, among other methods, by increasing and integrating coordination mechanisms existing ones, identifying resources and techniques to uncover fraudulent actors and their agendas, and sharing and leveraging information and knowledge gained from previous enforcement efforts. For more information about the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about alleged 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 NCDF’s online complaint form at: https://www. .justice.gov/disaster-fraud/ncdf-disaster-complaint-form.