Grand jury: Lexington man defrauded government for COVID loans, senior citizen for $100K+
A Kentucky business owner has been federally indicted for defrauding the government of more than $80,000 in loans through the Paycheck Protection Program during COVID-19.
Prageeth Hettiarachchi, a 41-year-old Lexington resident, is charged with seven counts of wire fraud — five are related to government loans, and two are connected to defrauding an elderly woman, according to an indictment.
Hettiarachchi is the owner of a ballroom dance studio operated through his companies, ZAH LLC and ZAH Investments, according to the indictment.
Through these companies, Hettiarachchi applied for four PPP loans during the pandemic and submitted false documents where his net profits were “significantly higher than reality,” according to the court document.
PPP loans were part of a COVID-19 pandemic relief program through the Small Business Administration which were designed to provide forgivable loans to small businesses for job retention and other expenses.
After submitting false info on paperwork, “Hettiarchchi qualified for PPP loans for ZAH LLC and larger PPP loans for ZAH Investments,” his indictment reads.
Hettiarachchi received more than $80,000 in PPP loans, according to court documents.
Two additional counts of wire fraud are tied to a scheme where Hettiarachchi is said to have stolen loans directly from an elderly victim and used them to pay personal bills and his daughter’s school tuition.
Hettiarachchi filed for bankruptcy in 2013, then went to the victim and asked for $30,000 with a promise to repay her in five years, according to the indictment. The victim remained anonymous in court records.
Over that five years, Hettiarachichi instead convinced the victim to loan him at least $150,000, according to court documents.
In 2015, he convinced the victim to open a line of credit to help his business. Over the course of four years, he and his wife are alleged to have charged $310,000 on two cards. More than $20,000 was used for his daughter’s school tuition. Hettiarachchi also falsely promised to give the victim an ownership stake in his company, according to court documents.
With the promise of repayment, Hettiarachchi would wire the money out of the victim’s personal retirement account, the indictment says.
Hettiarachchi is said to have convinced the victim to take out large loans in her name, and use her line of credit to make the loan payments.
With $30,000 in uncollected credit payments, the credit card company initiated legal proceedings against the victim, according to the indictment.
If convicted, Hettiarachchi faces 20 years in prison, fines and a supervised release of three years. He also faces the possibility of having to forfeit property and pay restitution, according to court documents.
This story was originally published August 7, 2023 at 10:07 AM.
