BOSTON — A Massachusetts business owner has been arrested in an $18 million Paycheck Protection Program loan fraud scheme, and accused of then using that money to buy a luxury condo in New York City.

Durgaprasad Rao, 65, of Carlisle, who was arrested Wednesday, is accused of garnering millions in fraudulent PPP loans for several companies through a multi-state scheme. He is expected to face a federal judge in Boston on Thursday on charges of two counts of wire fraud, Acting U.S. Attorney Joshua Levy said in a statement.

Rao remains in custody pending a detention hearing scheduled for May 17.

According to the charging documents, Rao is the owner and operator of Accelerated Engineering, LLC, a product engineering service provider, and Upstream Global Services, Inc., a software company that provides software consulting services and temporary staffing needs.

Prosecutors allege that between April 2020 and May 2021, Rao submitted numerous fraudulent applications seeking more than $18 million in PPP funds for various companies in multiple states including companies in Massachusetts, Wisconsin and Georgia, Levy said.

Nine of the fraudulent PPP loan applications Rao allegedly submitted were for companies he owned and controlled. For Rao’s Massachusetts-based companies, he received nearly $7 million in PPP loans – of which, $1.5 million was approved for forgiveness, Levy said.

Rao’s allegedly submitted PPP loan applications with fraudulent documents about payroll and the number of employees working for his companies, including fake tax returns and fake payroll records, Levy said.

Prosecutors allege that Rao then misused the funds he received, including by transferring the funds to foreign businesses he owned and purchasing a luxury condominium in New York City.

The charges of wire fraud each provide for a sentence of up to 20 years in prison, three years of supervised release and a fine of up to $250,000.

Rao’s arrest came just about three years after the Attorney General established the COVID-19 Fraud Enforcement Task Force on May 17, 2021 to combat and prevent pandemic-related fraud.

Anyone with information about attempted COVID-19 fraud may report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form.

This is a developing story. Check back for updates as more information becomes available.

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