Maple Grove Man Accused Of Fraudulently Receiving $560K+ In PPP Loans
MINNEAPOLIS (WCCO) -- The United States Attorney Erica H. MacDonald announced Monday that a 47-year-old Maple Grove man faces a federal charge accusing him of defrauding the U.S. Small Business Administration's Paycheck Protection Program (PPP).
Aditya Raj Sharma was arrested on Nov. 13 and has since been federally charged with one count of wire fraud. He made his first appearance in U.S. District Court in St. Paul Monday.
According to the indictment, Sharma submitted a false and fraudulent loan application seeking $562,500 through the PPP, which was meant to help businesses struggling during the pandemic. He allegedly said he had 29 employees on payroll even though records show he paid no wages to a single employee.
The application was subsequently approved and he received the funds. He then allegedly used the money to enrich himself personally, transferring $500,000 to a personal bank account, putting $5,000 down toward the installation of a pool worth $64,300 and transferring another $14,000 to a financial account in India.
Sharma reached out to WCCO to share his perspective about the allegations.
He said that he did take out the loan, but he did not intent fraud; he took the loan out under the name of a company he founded called Crosscode. A legal challenge between him and investors over the ownership of the company had not been resolved when he took out the loan.
"I did apply under the understanding that I am still the owner and I can do that," Sharma said. He said the money was used to start a new company based in Minnesota called Kloudgaze that eventually hired people. Sharma said the court challenge over ownership of his previous company was resolved in August of 2020, after he took out the loan.
As for the indictment filed by the US Attorney, Sharma told WCCO he is cooperating "fully, fully, fully with them."
He said he is currently working on a repayment plan to return the money. When asked why he took out the loan in the first place, he said the rules were not clear at the time.
"As to say the devil is in the details. At that time the details on the CARES program was very sketchy. We were not really clear. Even the banks weren't really clear. What are the dos and don'ts," Sharma said. "Rules not fully understood at that time. And nobody knew what the rules around the CARES program would be."
Sharma said the money alleged to be transferred to a personal account was actually placed in an account for his new company Kloudgaze, and that account was connected to a personal account. He said the $14,000 transferred to a financial account in India was a payment for third party consulting services that he describes as completely legal. And he says the $5,000 deposit for a pool at his home did come from the business account but was going to be corrected through accounting methods.
Sharma, who lives in Maple Grove, says he hopes the issue will be settled with the US Attorney without going to trial.
The FBI investigated this case.
