Investor Fraud: Man Sentenced to 7.5 Years for $15 Million Scam
Babu Ramaraj, a resident of Aldi, was sentenced today to seven years and six months in federal prison for defrauding numerous investors across multiple states, including Virginia, Maryland, North Carolina, New Jersey, and Missouri. The scheme resulted in $15 million in losses, as announced by the U.S. Attorney’s Office for the Eastern District of Virginia.
The Fraudulent Scheme
Ramaraj’s Company and False Claims
Ramaraj was the owner of DAB Inspection and Consulting Services, LLC (DAB), a small home contracting business specializing in patio and deck projects. He falsely claimed that DAB had secured lucrative contracts with agencies like the Federal Aviation Administration and the Virginia Department of Transportation (VDOT) for significant infrastructure projects. Additionally, Ramaraj misled investors into believing that DAB was engaged in a joint venture with the Washington, DC Water Clean Rivers Project, boasting contracts worth tens of millions of dollars.
Deceptive Tactics to Attract Investors
To convince investors to provide large upfront bond payments, Ramaraj falsely asserted that DAB needed the funds to secure these non-existent contracts, claiming he was unable to obtain bank financing due to the company’s lack of experience. To support his fabrications, he produced forged contract award letters, invoices, financial records, and other falsified documents.
Financial Impact and Lifestyle
Investors Misled from January 2020 to May 2024
Between January 2020 and May 2024, Ramaraj targeted individuals, including members of his local cricket league, by pitching high-interest investment opportunities that promised annualized returns of 30% or more. Instead of utilizing the investor funds for legitimate bond payments, Ramaraj diverted the money into his online brokerage accounts for trading securities, wired over $1 million to India, and funded a lavish lifestyle by purchasing luxury cars, including multiple Teslas, and acquiring real estate.
Losses and Arrest
While Ramaraj raised nearly $40 million from investors, his actions caused approximately $15 million in losses. He continued to deceive investors until his arrest on May 30, 2024. Since then, he has been held without bond as a flight risk, according to court records.
Conclusion
Ramaraj’s sentencing serves as a reminder of the severe consequences of investment fraud and the importance of due diligence for investors. The U.S. Attorney’s Office remains vigilant in combating fraudulent schemes that prey on unsuspecting individuals.
