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Aldie resident Babu Ramaraj, 47, who owned DAB Inspection and Consulting Services, a small home contractor with modest revenues doing patio and deck projects, was sentenced to more than seven years in prison for causing upwards of $15 million in losses, federal authorities announced.
His victims were primarily in Virginia, Maryland, North Carolina, New Jersey, and Missouri.
According to court documents, Ramaraj claimed to investors and potential investors that DAB had lucrative contracts with the FAA, VDOT, and others, as well as being a joint venture partner on a Washington DC Water Clean Rivers Project, allegedly to perform inspection work for tens of millions of dollars each.
Ramaraj would claim he needed large upfront payments from his victims to secure the work, but could not do it through the bank due to the relative youth of DAB as a company.
To further his scheme, prosecutors say that Ramaraj supplied to victims falsified contract award letters, invoices, DAB financial records, and other documents to induce dozens of investors to loan funds to DAB.
Those bonds were never paid.
Between January 2020 and May 2024, Ramaraj would pitch individuals - including members of his own Loudoun County cricket league - the opportunity to loan his company money at high interest rates.
He then used money from later investors to ay the initial investigators while continuing to recruit friends and family to invest. The cycle would then repeat.
Instead of paying for the promised bonds, Ramaraj:
- Transferred investor funds to his online brokerage accounts to engage in securities trades;
- Wired over $1 million to accounts in India;
- Purchased several automobiles, including several Teslas;
- Obtained real properties;
- Incurred millions in stock market trading losses;
- Made other payments to fund his lifestyle.
Ramaraj took in nearly $40 million and caused losses to investors of approximately $15 million.
Ramaraj was confronted by two investors in October 2023, and officials said that he was continuing to pitch up until his arrest in late May. He's been held in custody as a flight risk since then.
In addition to his prison term, a judge also ordered that Ramaraj pay more than $15 million in restitution.
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