Man Sentenced to 7.5 Years for $15 Million Investor Fraud Scheme

Babu Ramaraj, 47, sentenced to over 7 years in prison for defrauding investors in a $15 million Ponzi scheme.Photo byMateusz ZatorskionUnsplash

Aldi resident Babu Ramaraj, 47, was sentenced today to seven years and six months in federal prison for defrauding dozens of investors across several states, including Virginia, Maryland, North Carolina, New Jersey, and Missouri, resulting in $15 million in losses, the U.S. Attorney's Office, Eastern District of Virginia announced.

According to court records, Ramaraj owned DAB Inspection and Consulting Services, LLC (DAB), a small home contractor focused on patio and deck projects.

Ramaraj falsely claimed that DAB had secured lucrative contracts with the Federal Aviation Administration, the Virginia Department of Transportation (VDOT), and other agencies for major infrastructure projects.

He also told investors that DAB was involved in a joint venture with the Washington, DC Water Clean Rivers Project, with contracts purportedly worth tens of millions of dollars, court documents revealed.

Ramaraj convinced investors that he needed large upfront bond payments to secure these contracts but was unable to obtain financing from banks due to DAB's youth as a company.

To support his false claims, he provided investors with forged contract award letters, invoices, financial records, and other falsified documents, according to court filings.

From January 2020 through May 2024, Ramaraj pitched high-interest investment opportunities to individuals, including members of his Loudoun County cricket league, promising annualized returns of 30% or more.

Instead of using investor funds for the supposed bond payments, Ramaraj transferred the money into his online brokerage accounts for securities trading, wired over $1 million to India, purchased luxury cars, including several Teslas, and acquired real estate, the department stated.

He also incurred millions in stock market losses while funding a lavish lifestyle. In total, Ramaraj collected nearly $40 million from investors and caused approximately $15 million in losses, according to the U.S. Attorney’s Office.

Ramaraj continued to deceive other investors until his arrest on May 30, 2024. He has been held without bond as a flight risk since his arrest, court records confirmed.