SEC Charges Virginia Engineer with Orchestrating $30 Million Offering Fraud
- Written by Newsfile
July 25, 2024 2:02 PM EDT | Source: Newsfile SEC Press Digest[1]
Washington, D.C.--(Newsfile Corp. - July 25, 2024) - The Securities and Exchange Commission today charged Babu Ramaraj, a resident of Aldie, Virginia, with defrauding more than 70 investors of approximately $31 million through his company, DAB Inspection and Consulting Services LLC.
The SEC’s complaint alleges that, from February 2019 through May 2024, Ramaraj solicited and lured his victims with the promise of 40-60 percent annual investment returns. According to the complaint, Ramaraj falsely told investors that he would use their funds to finance surety and performance bonds for large-scale, lucrative contracts DAB had been awarded to provide quality assurance services to state and local governments. Ramaraj allegedly created fake contracts and financial documentation to support his misrepresentations. The SEC alleges that, in reality, the contracts never existed, and Ramaraj instead used investor funds to purchase luxury automobiles, jewelry, and property, engage in unprofitable options trading, and pay earlier investors.
“As we allege, Ramaraj promised his investors unrealistic returns from government contracts he never had and then used their money to fund his own lifestyle and to make Ponzi-like payments to maintain the deception,” said Scott A. Thompson, Associate Director of Enforcement in the SEC’s Philadelphia Regional Office. “We will continue to hold accountable those who exploit investors’ trust for personal gain.”
The SEC's complaint, filed in the United States District Court for the Eastern District of Virginia, charges Ramaraj with violating antifraud provisions of the federal securities laws and seeks an injunction, disgorgement, penalties, and an officer-and-director bar.
In a parallel action, in June 2024, the U.S. Attorney’s Office for the Eastern District of Virginia announced criminal charges against Ramaraj for wire fraud and unlawful monetary transactions. Those charges are pending.
The SEC’s investigation was conducted by Christine R. O'Neil, Matthew B. Homberger, and Michael A. Cuff in the Philadelphia Regional Office. It was supervised by Brian R. Higgins, Brendan P. McGlynn, Mr. Thompson, and Nicholas P. Grippo. The SEC’s litigation will be led by Karen M. Klotz and Judson Mihok and supervised by Gregory R. Bockin. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Eastern District of Virginia, the FBI, and the Virginia State Corporation Commission.
SOURCE: Newsfile SEC Press Digest[2]
References
- ^ Newsfile SEC Press Digest (www.newsfilecorp.com)
- ^ Newsfile SEC Press Digest (www.newsfilecorp.com)