Lexington businessman admits false promises in taking $281,000 from client illegally
A Lexington business owner has admitted getting more than $280,000 from a woman using false promises to give her a share of his business.
Prageeth S. Hettiarachchi, 41, pleaded guilty to two charges of wire fraud Monday in federal court in Lexington. In addition to getting more than $280,000, Hettiarachchi also acknowledged fraudulently obtaining $83,200 in loans from the federal government.
The maximum sentence for mail fraud is 20 years in prison.
Hettiarachchi owned a company called ZAH LLC, which did business as Kentucky Dancesport Challenge and the Ballroom House, and ZAH Investments, which did business as ZAH Construction LLC, according to the court record.
The businesses were based in Lexington, his plea said.
Hettiarachchi used two methods to illegally obtain money to bolster the revenue of his companies, according to his plea agreement.
Between June 2013 and 2018, he convinced a client at the Ballroom House, identified in the plea only as T.E., to loan him money and to obtain loans or credit cards in her name for his benefit, according to the court record.
Hettiarachchi used the false pretense that he would repay T.E. and give her 20% of his business, but didn’t.
He illegally obtained $281,059 from T.E., according to the court record.
On another front, Hettiarachchi submitted false information to obtain four loans under the Paycheck Protection Program, approved by Congress to help businesses pay employees as business disruptions driven by the COVID-19 pandemic choked the economy.
Hettiarachchi misrepresented his income, expenses and net profits in applications for the loans.
There has been extensive fraud in the PPP program and others Congress approved to deal with the pandemic, including a number of cases in Kentucky.
Hettiarachchi’s plea agreement includes a requirement to repay T.E. and the government. He also agreed not to appeal any sentence that is not above the advisory guideline range of 21 to 27 months in prison.
Chief U.S. District Judge Danny C. Reeves scheduled sentencing in May.
