Mukund Mohan, CTO of BuildDirect.com Technologies Inc., was arrested on July 23 in Washington state on charges of money laundering and wire fraud.
U.S. prosecutors have indicted a senior executive at one of Vancouver’s top tech companies with money laundering and wire fraud.
Mukund Mohan, CTO of BuildDirect.com Technologies Inc., was arrested on July 23 in Washington state after being accused of fraudulently soliciting more than $ 5.5 million in loans from the US program paycheck protection (PPP), then laundering the proceeds.
The 48-year-old American, who lives in suburban Seattle, is said to have submitted at least eight fraudulent PPP loan applications on behalf of six different companies between April and June 2020.
US government-backed economic aid worth $ 521 billion – made available in March at the start of the COVID-19 pandemic – is available through the PPP to help small businesses keep their jobs through forgivable loans.
None of the U.S. prosecutors’ charges relate to activities involving BuildDirect, better known as an e-commerce company specializing in home building supplies.
According to court documents, Mohan allegedly used a business he bought in May 2020, Mahenjo Inc., to apply for a fraudulent loan for US $ 431,250.
Authorities say the executive falsely told a financial institution that Mahenjo had dozens of employees responsible for $ 2.3 million in salary expenses in 2019.
Mohan allegedly submitted forged and amended documents, including false federal income tax returns and amended incorporation documents, in the loan application.
Prosecutors also accuse him of transferring at least US $ 231,000 in fraudulently obtained loan proceeds to his personal brokerage account.
Among the seven loan applications ranging from US $ 150,000 to US $ 1.8 million, US officials say there is no record of any of the companies Mohan submitted on behalf of paying the salaries of the workers. employees or payroll taxes.
Prior to BuildDirect, Mohan cut his teeth in the tech industry working at companies such as Microsoft Corp., Hewlett Packard Enterprise Co., and Amazon.com Inc.
According to his profile listed on the BuildDirect website as of July 26, “Mukund [Mohan] is also a successful serial entrepreneur, founding three companies and selling two, creating more than 4.7 times the returns for investors over five years. Most notably, he was the founder of BuzzGain, a SaaS social media monitoring product, acquired by Meltwater Inc. in 2011. ”
In Mohan’s LinkedIn profile, he describes his role as the sales and technology manager for BuildDirect.
Often touted as the Amazon of home construction supplies, BuildDirect filed for creditor protection in October 2017.
Mohan joined the company in 2018, the same year he left Amazon, according to his LinkedIn profile.
2017 British Columbia court documents revealed that BuildDirect owed lenders $ 75 million in principal, while operating costs exceeded revenue by $ 2.6 million per month.
BuildDirect ultimately raised US $ 28 million and converted US $ 15 million of interim financing provided in the proceedings under the Companies’ Creditors Arrangement Act.
And as part of the plan, the creditors agreed to convert US $ 58 million of debt into equity.
CEO Dan Park, who left Amazon to join BuildDirect as COO, took over from founder Jeff Booth in fall 2017, taking the company out of creditor protection by March 2019.
“We are in the best financial position we have ever been in in the 19 year history of BuildDirect,” said Park. BIV in 2018.
Mohan and BuildDirect did not respond to separate maintenance requests from BIV before publication.
None of the allegations against Mohan have been proven in court.