Greenbelt, Maryland – U.S. District Judge Deborah L. Boardman sentenced Denish Sahadevan, a/k/a “Danny Devan,” age 32, of Potomac, Maryland, today to three years in federal prison, followed by three years of supervised release, for wire fraud, aggravated identity theft and money laundering, relating to his scheme to defraud lenders and the Small Business Administration (“SBA”) of more than $1.2 million in Paycheck Protection Program (“PPP”) loans and Economic Injury Disaster Loans (“EIDL”). Judge Boardman also ordered that Sahadevan will forfeit the cash and Bitcoin seized during a search of his residence on February 24, 2023 and will be required to pay restitution and a forfeiture money judgement of at least $429,906. Sahadevan provided a $100,000 check to the Court today as part of his restitution.
The sentence was announced by United States Attorney for the District of Maryland Erek L. Barron; Acting Special Agent in Charge R. Joseph Rothrock of the Federal Bureau of Investigation, Baltimore Field Office; and John T. Perez, Special Agent in Charge, Headquarters Operations, Office of Inspector General for the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau.
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was a federal law enacted in March 2020 to provide emergency financial assistance to Americans suffering from the economic effects caused by the COVID-19 pandemic. Financial assistance offered through the CARES Act included forgivable loans to small businesses for job retention and certain other expenses, through the PPP, as well as EIDLs to help small businesses meet their financial obligations, both administered through the SBA.
According to his plea agreement, beginning in about March 2020, Sahadevan submitted EIDL and PPP application on behalf of four Maryland entities that he controlled, often creating fraudulent and fabricated documents, such as tax forms and bank statements, to be used in the applications. In addition, Sahadevan used the identifying information belonging to a tax preparer that he knew, without that person’s knowledge or agreement, to legitimize the fabricated tax forms he created and submitted.
Specifically, Sahadevan admitted that he used his home in Rockville, Maryland to create the fabricated documents and electronically apply for EIDL and PPP loans. Sahadevan applied for approximately 71 PPP loans totaling approximately $941,794.75, and successfully obtained approximately $146,000 in PPP benefits. Sahadevan applied for and received eight EIDLs totaling $283,900. On the EIDL loans, Sahadevan induced his father into becoming a co-signer for the loan, then forged his father’s signature on the loan application. Sahadevan’s father would not have agreed to sponsor the loan had he known of its fraudulent nature and contents.
As detailed in the plea agreement, Sahadevan caused the fraud proceeds to be deposited into bank accounts he opened specifically for that purpose, then laundered the funds by engaging in several monetary transactions, including purchasing and trading securities and cryptocurrency, settling personal debts and making payments to his girlfriend.
In addition, between December 16, 2021 and January 10, 2022, Sahadevan applied to a financial institution for a $1,336,000 loan to purchase a property in Potomac, Maryland. In the loan application, Sahadevan failed to disclose the $283,900 he owed to the United States for the EIDL benefits he fraudulently received. Relying on Sahedevan’s representations, the financial institution approved the loan, which was used to purchase the Potomac property.
On February 24, 2023, law enforcement executed a search warrant at Sahadevan’s Potomac residence and recovered multiple electronic devices, a can containing approximate 18 driver’s licenses belonging to other individuals, what appeared to be a gold physical Bitcoin in a black case, and approximately $17,043 in cash found in a suitcase in a bedroom closet. The cash and Bitcoin constitute proceeds of the fraud scheme.
The District of Maryland Strike Force is one of five strike forces established throughout the United States by the U.S. Department of Justice to investigate and prosecute COVID-19 fraud, including fraud relating to the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The CARES Act was designed to provide emergency financial assistance to Americans suffering the economic effects caused by the COVID-19 pandemic. The strike forces focus on large-scale, multi-state pandemic relief fraud perpetrated by criminal organizations and transnational actors. The strike forces are interagency law enforcement efforts, using prosecutor-led and data analyst-driven teams designed to identify and bring to justice those who stole pandemic relief funds.
For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus. Anyone with information about allegations of 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 the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
United States Attorney Erek L. Barron commended the FBI and the Office of Inspector General for the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau for their work in the investigation. Mr. Barron thanked Assistant U.S. Attorney Bijon A. Mostoufi, who prosecuted the case. He also recognized the assistance of the Maryland COVID-19 Strike Force Paralegal Specialist Joanna B.N. Huber.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao/md.
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