A Maple Grove man is facing federal charges, accused of using more than $500,000 in Paycheck Protection Program funds to install a pool at his home and pad his personal bank account.
Aditya Raj Sharma, 47, is charged with one count of wire fraud in connection to his alleged attempt to defraud the U.S. Small Business Administration's Paycheck Protection Program (PPP), the U.S. Attorney's Office said in a news release.
The CARES Act provided billions of dollars in forgivable PPP loans to small businesses to use on payroll costs and other expenses amid the COVID-19 pandemic.
But Sharma is accused of defrauding the program by filing a fake loan application to receive $562,500 in PPP money, which he used on personal expenses.
He was arrested on Nov. 13 and made his initial court appearance on Monday.
The U.S. Attorney's Office, citing court documents, says Sharma was the founder and CEO of a cloud-based software development company Crosscode Inc. in California until he was fired in November 2019.
In May of this year, he created a cloud-computing technology company called Kloudgaze Inc. and on April 26 he submitted a fake loan application in the name of "Crosscode dba Kloudgaze" seeking $562,500 in PPP money.
The application made several false claims, including that Sharma was the owner and CEO of Crosscode, which did business under the name Kloudgaze; that he had 29 employees though state records show he paid no wages to a Kloudgaze employee; and that Kloudgaze was in operation on Feb. 15, the release says. He also included fabricated bank statements with his application.
On April 29, Sharma's PPP loan application was approved and he received $562,500 in funds – none of which he used toward small business expenses as is required by law, the release claims.
Instead, he transferred $500,000 of the PPP money to a personal bank account, spent $5,000 on a down payment toward the installation of a $64,300 pool at his home, and transferred about $14,000 to a financial account in India, prosecutors allege.
The U.S. Department of Justice asks anyone with information about allegations of attempted fraud involving COVID-19 to report it by calling 866-720-5721 or by filling out a complaint form online here.