New York nightclub owners defrauded the COVID-19 pandemic relief fund

ALBANY, N.Y – Deborah Budhraj, 52, and her husband Adesh Budhraj, 54, residents of Ballston Lake, New York, were sentenced today to prison and two years of supervised release. The couple was convicted of conspiring to defraud financial aid programs set up to help businesses during the coronavirus pandemic.

The Budhrajs, former co-owners of a Schenectady restaurant, bar and nightclub known in court documents as “Establishment A,” fraudulently applied for and received three loans totaling $558,514.

These funds came from two Paycheck Protection Program (PPP) loans and an Economic Injury Disaster Loan (EIDL) between April 2020 and June 2021. The loans were intended to support the company and its employees during the economic downturn caused by the pandemic.

Although the Budhrajs transferred management responsibilities to another couple in March 2020 following a sales agreement, they admitted that they used the loans for personal gains, including real estate transactions and other ineligible expenses. Deborah Budhraj also improperly obtained forgiveness for two PPP loans by certifying compliance with the program’s rules.

Senior U.S. District Judge Lawrence E. Kahn ordered each defendant to pay a $5,000 fine and $558,514 in restitution to the U.S. Small Business Administration (SBA), which they complied with prior to sentencing.

The case was prosecuted by Assistant U.S. Attorney Michael Barnett and investigated by the FBI.

This sentencing comes amid increased efforts by the Justice Department’s COVID-19 Fraud Enforcement Task Force to combat pandemic-related fraud and ensure strict consequences for those who exploit federal relief efforts.

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