Minnesota man pleads guilty to multimillion small business fraud

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An Indian-American from Maple Grove, Minnesota, pleaded guilty July 28, 2021, to fraudulently applying for $9,619,046.46 from the U.S. Small Business Administration’s Paycheck Protection Program, of which he fraudulently obtained and misappropriated more than $1.7 million, announced Acting U.S. Attorney W. Anders Folk.

According to court documents sourced in the press release from the U.S. Attorney’s Office, 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, he was removed as an officer and terminated from the company by its board of directors.

Between May 2020 and July 2020, Sharma created three separate technology companies, Kloudgaze Inc., Neoforma LLC, and Mokume LLC.

From April 2020 through August 2020, Sharma applied for 16 loans for $9,619,046.46 through the U.S. Small Business Administration’s Paycheck Protection Program (“PPP”) from ten different lenders by submitting false and fraudulent applications under the names of his various technology companies, the press release said.

Sharma submitted fabricated supporting records, made false statements about the number of employees he had and the amount of payroll expenses he incurred, and made false statements about the relevant corporate entities and intended use of the loan proceeds, court records quoted from show.

As a result of Sharma’s fraud scheme, lenders approved three of his PPP applications and deposited $1,773,600 in PPP funds into bank accounts controlled by Sharma.

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 the installation of a $64,300 backyard pool at his residence.

During the investigation, law enforcement obtained warrants to seize approximately $674,980.76 in fraudulent proceeds held in multiple bank accounts controlled by Sharma. As part of the plea agreement, these seized funds will be forfeited by Sharma to the government.