A man has been charged over an alleged fraud where $31 million was stolen from investors.
Babu Ramaraj, of Aldie, Virginia, is accused of using his company, DAB Inspection and Consulting Services LLC, to carry out the scam.
The SEC accuses Ramaraj of soliciting and luring his victims with a promise of 40-60 percent annual investment returns.
The SEC says he falsely told investors he would use their funds to buy 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 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.
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Scott A. Thompson, Associate Director of Enforcement in the SEC’s Philadelphia Regional Office, said:
“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.
“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.
