SEC Charges Virginia Engineer With Organizing $31 Million Offering Fraud
The U.S. Securities and Exchange Commission charged 47-year-old Babu Ramaraj, a resident of Aldie, Va., with defrauding more than 70 investors of approximately $31 million through his company, DAB Inspection and Consulting Services LLC, and the fraudulent offer and sale of securities in the form of promissory notes.
Ramaraj is the principal and 47% owner of DAB, a purported oil and gas consulting company with its principal place of business in Sterling, Va. From in or about June 2006 to March 2024, Ramaraj was licensed as a professional engineer in Virginia.
The SEC’s complaint alleges that, from February 2019 through May 2024, Ramaraj solicited and lured his victims with the promise of 40% to 60% annual investment returns. According to the complaint, Ramaraj falsely told investors that he would use their funds to finance surety and performance bonds for large-scale, lucrative contracts DAB had been awarded to provide quality assurance services to state and local governments. Ramaraj allegedly created fake documentation to support his misrepresentations, fabricating over 20 documents including purported government contract awards, invoices, and DAB financial statements.
The SEC alleges that, in reality, the contracts never existed, and Ramaraj instead used investor funds to purchase luxury automobiles, jewelry and property; engage in unprofitable options trading; and pay earlier investors.
“As we allege, Ramaraj promised his investors unrealistic returns from government contracts he never had and then used their money to fund his own lifestyle and to make Ponzi-like payments to maintain the deception,” said Scott A. Thompson, associate director of enforcement in SEC’s Philadelphia regional office. “We will continue to hold accountable those who exploit investors’ trust for personal gain.”
The SEC’s complaint, filed in the U.S. District Court for the Eastern District of Virginia, charges Ramaraj with violating antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934, and seeks an injunction, disgorgement, penalties, and an officer-and-director bar.
In a parallel action, in June 2024, the U.S. Attorney’s Office for the Eastern District of Virginia announced criminal charges against Ramaraj for wire fraud and unlawful monetary transactions. Those charges are pending.
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