Former MD Social Media Influencer Sentenced In COVID Loan Fraud Scheme

POTOMAC, MD — A former social media influencer from Potomac was sentenced to three years in federal prison for his role in trying to defraud the Small Business Administration of more than $1.2 million in Paycheck Protection Program loans and Economic Injury Disaster Loans, according to the U.S. Department of Justice.

U.S. District Judge Deborah Boardman on Tuesday sentenced 32-year-old Denish Sahadevan, better known as Danny Devan on TikTok, to prison, plus three years of supervised release, for wire fraud, aggravated identity theft and money laundering.

Danny Devan became famous on TikTok for creating videos about investing in stocks and cryptocurrency, Yahoo! Finance reported.

The judge also ordered Sahadevan to forfeit the cash and Bitcoin seized during a search of his Potomac residence last February. Sahadevan will also be required to pay restitution and a forfeiture money judgment of nearly $430,000. He provided a $100,000 check to the U.S. District Court on Tuesday as part of his restitution.

The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, was a federal law enacted in March 2020 to provide emergency financial assistance to Americans suffering from the economic effects caused by the COVID-19 pandemic.

Financial assistance offered through the CARES Act included forgivable loans to small businesses for job retention and certain other expenses, through Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDL) to help small businesses meet their financial obligations, both administered through the SBA.

Beginning in March 2020, Sahadevan submitted EIDL and PPP application on behalf of four Maryland entities that he controlled, often creating fraudulent and fabricated documents, such as tax forms and bank statements, to be used in the applications, according to his plea agreement.

Sahadevan also used the identifying information belonging to a tax preparer that he knew, without that person’s knowledge or agreement, to legitimize the fabricated tax forms he created and submitted, the U.S. Attorney’s Office for the District of Maryland said.

Sahadevan admitted that he used his Maryland home to create the fabricated documents and electronically apply for EIDL and PPP loans. He applied for about 71 PPP loans totaling about $942,000 and successfully obtained about $146,000 in PPP benefits.

Also, Sahadevan applied for and received eight EIDLs totaling $283,900. On the EIDL loans, Sahadevan got his father to become a co-signer for the loan, then forged his father’s signature on the loan application.

According to the plea agreement, Sahadevan laundered the funds by engaging in several monetary transactions, including purchasing and trading securities and cryptocurrency, settling personal debts and making payments to his girlfriend.

In addition, between Dec. 16, 2021 and Jan. 10, 2022, Sahadevan applied to a financial institution for a $1,336,000 loan to purchase a property in Potomac. In the loan application, Sahadevan failed to disclose the $283,900 he owed to the U.S. for the EIDL benefits he fraudulently received, the U.S. attorney’s office said.

The financial institution approved the loan, which Sahadevan used to purchase the Potomac property.

On Feb. 24, 2023, law enforcement officials executed a search warrant at Sahadevan’s Potomac residence and recovered multiple electronic devices, a can containing about 18 driver’s licenses belonging to other people, what appeared to be a gold physical Bitcoin in a black case, and about $17,043 in cash found in a suitcase in a bedroom closet.

The cash and Bitcoin constituted proceeds of the fraud scheme, the U.S. attorney’s office said.