Shashank Rai, an Indian origin engineer based out of Texas, has been accused of filing for $13 million in forgivable loans. He used a non-existing company to file under the Coronavirus Aid, Relief, and Economic Security Act. This act is for assisting small companies and businesses during the COVID 19 pandemic. The charges came to limelight on Wednesday when the Federal court read the related documents against the accused.
The CARES Act, enacted March 29, aims at providing emergency financial aid to Americans who are suffering a financial breakdown during the COVID-19 pandemic. And, the forgivable loan is a part of the various reliefs that are being offered under the CARES act. This focuses on helping small businesses who aren’t able to pay their employee as the work has come to a temporary halt.
The 30-year-old engineer staying in Beaumont has been alleged by the court for fraud and for making fake and untrue statements for seeking loans. He talked to two different financial institutions on behalf of Rai Family LLC. The fact is that the company does not exist.
The U.S. Department of Justice news release clarified the various fake claims made by Shashank for accessing the loan benefits. The application that he submitted to the banks claimed that the company which Shashank owns consists of 250 employees with a monthly payroll between $1.2 million and $4 million.
After investigating the entire claims made through the Rai’s application, the Texas Workforce Commission rose suspicion. The investigating body was not able to find any records of him or even the business that he claimed to own. There were no proofs of him paying wages to his employees in 2020. In addition, no reports were attached which clarified the payment made during the fourth quarter of 2019 or the first quarter of 2020.
After everything was checked by the Texas Comptroller’s Office of Public Accounts, the suspicion became evident.
Joseph D. Brown, the U.S. Attorney for the Eastern District of Texas stated, “The behavior, in this case, was very brazen.”
The attorney also exclaimed, “Those who submit these applications for loans or other assistance need to understand that there are people checking on the representations made, and those representations are made under oath and subject to penalties of perjury.”
Rai, in order to seek a loan, prepared two different applications for two different unnamed lenders. While he requested a loan of $10 million from one bank and $3 million in loan from another bank. The guy made two different claims about the wages paid by his business in these two different applications. For the prior one, he mentioned a figure of $4 million employees’ monthly expenses. And, in the other one, he changed that expense to $1.2 million monthly employee wages.
During the investigation, various handwritten notes were found in the trash outside his house. The notes talked about the strategies for filing the application of the $3 million loans.
The case will be carried in the U.S. District Court for the Eastern District of Texas.