SEC v. BABU RAMARAJ, No. 1:24-cv-01282, District of Columbia (July 25, 2024) — Complaint

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
ALEXANDRIA DIVISION

SECURITIES AND EXCHANGE COMMISSION,
 Case No. _______________
Plaintiff,
 JURY TRIAL DEMANDED
v.

BABU RAMARAJ,

Defendant.

COMPLAINT
Plaintiff Securities and Exchange Commission (the “Commission”) files this Complaint
against defendant Babu Ramaraj (“Ramaraj” or “Defendant”) and alleges as follows:
SUMMARY
1. This matter concerns an offering fraud conducted by Ramaraj through his
company, DAB Inspection and Consulting Services, LLC (“DAB”), a civil engineering and
consulting company based in Sterling, Virginia.
2. From in or about February 2019 through May 2024, Ramaraj raised
approximately $31 million from over 70 investors through the fraudulent offer and sale of
securities in the form of promissory notes.
3. Ramaraj promised exorbitant rates of return and told prospective investors that he
would use their funds to finance surety and performance bonds required to guarantee DAB’s
performance of quality assurance services for government-sponsored multi-million-dollar
infrastructure projects.
24-cv-1282

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4. Ramaraj deceived investors by making materially false and misleading statements
and omissions concerning the existence of lucrative government contracts, DAB’s financial
condition, and Ramaraj’s intended use of investor proceeds.
5. To induce investments and disguise his misconduct, Ramaraj fabricated over 20
documents, including purported government contract awards, invoices, and DAB’s financial
statements.
6. In reality, DAB had not won any of the promised government contracts, and
Ramaraj did not use investor proceeds for bonds as promised.  Instead, Ramaraj used most of the
proceeds to fund interest payments to earlier investors (“Ponzi” payments) and for his personal
benefit.
7. As DAB and Ramaraj became unable to pay interest and principal on the
promissory notes in the fall of 2023, Ramaraj admitted to some investors that DAB had not been
awarded certain government contracts he touted and to two other investors that he had fabricated
a number of contract awards, invoices, and bank statements.
VIOLATIONS AND RELIEF SOUGHT
8. By engaging in the conduct described in this Complaint, Ramaraj violated, and
unless enjoined will continue to violate, Section 17(a) of the Securities Act of 1933 (“Securities
Act”) [15 U.S.C. § 77q(a)] and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange
Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
9. The Commission seeks to permanently enjoin Ramaraj from violating these laws
again; disgorgement of ill-gotten gains derived from his unlawful activity, with prejudgment
interest; civil penalties pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and
Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)]; an order prohibiting Ramaraj

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from serving as an officer or director pursuant to Section 20(e) of the Securities Act [15 U.S.C. §
77t(e)] and Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)]; and other relief the
Court may deem just and appropriate.
10. Unless Ramaraj is restrained and enjoined, he will again engage in the acts,
practices, transactions, and courses of business set forth in this Complaint or in acts, practices,
transactions, and courses of business of similar type and object.
JURISDICTION AND VENUE
11. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d), and
22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d), and 77v(a)] and Sections 21(d), 21(e),
and 27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa].
12. The Court has personal jurisdiction over Ramaraj.  Ramaraj resides and transacts
business in the Eastern District of Virginia and many of his acts and transactions constituting
violations of the Securities Act and Exchange Act occurred in Loudoun County in the Eastern
District of Virginia.
13. Venue in this District is proper pursuant to Section 22(a) of the Securities Act [15
U.S.C. § 77v(a)] and Section 27 of the Exchange Act [15 U.S.C. § 78aa].  Defendant Ramaraj
resided in Loudoun County at all times relevant to this Complaint, and DAB’s principal place of
business was in Loudoun County.  In addition, certain of the acts, practices, and courses of
business constituting the violations of the federal securities laws alleged herein occurred within
Loudoun County in the Eastern District of Virginia.

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14. In connection with the conduct alleged in this Complaint, Ramaraj, directly or
indirectly, singly or in concert with others, made use of the means or instrumentalities of
interstate commerce, the means and instruments of transportation or communication in interstate
commerce, or the mails, or any facility of any national securities exchange, including using the
internet to email victim investors.  Wire transfers were also used to transfer funds to further
Ramaraj’s scheme.
DEFENDANT
15. Babu Ramaraj, age 47, is a resident of Aldie, Virginia.  Ramaraj is the principal
and 47% owner of DAB, a purported oil and gas consulting company with its principal place of
business in Sterling, Virginia.  From in or about June 2006 to March 2024, Ramaraj was licensed
as a professional engineer in Virginia.
RELEVANT ENTITY
16. DAB Inspection and Consulting Services, LLC is a Virginia limited liability
with its principal place of business in Sterling, Virginia.  Ramaraj originally formed DAB in
2015 to perform residential construction and inspection services.  Upon information and belief,
since in or around 2019, Ramaraj has used DAB as a sham quality assurance business to
perpetrate the fraud described in this Complaint.
17. Ramaraj is a 47% owner of DAB, controlled the company’s day-to-day
operations, and exercised complete control over DAB’s bank accounts and books and records.
Ramaraj also had complete control over the use of investors’ funds.

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FACTS
I.         DEFENDANT         RAMARAJ FRAUDULENTLY INDUCED INVESTORS TO BUY
PROMISSORY NOTES
 A. Overview of Ramaraj’s Fraudulent Promissory Note Offering
18. From in or about February 2019 through May 2024, Ramaraj orchestrated a
scheme through which he raised approximately $31 million from over 70 investors through the
offer and sale of promissory notes.
19. Ramaraj solicited investors from members of his local cricket league in Northern
Virginia, their friends and family members, and other acquaintances.
20. Ramaraj falsely told prospective investors that his company, DAB, had been
awarded lucrative contracts to provide quality assurance services largely to state and local
governments, including the Commonwealth of Virginia and the District of Columbia, and needed
to raise capital to cover surety and performance bonds required for these purported contracts.
21. Ramaraj did not disclose to prospective investors his intention to use investors’
funds for other purposes, such as to make repayments to other investors and pay personal
expenses.
22. In exchange for providing DAB with funds for the purported bonds, Ramaraj and
DAB executed promissory notes in favor of the investors.  The promissory notes typically
carried two or three-year terms and provided for high fixed rates of monthly interest payments
with annualized returns of between approximately 40% and 60% and the principal returned at
maturity.

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23. Two of Ramaraj’s earlier investors (“Individual A” and “Individual B”)
introduced Ramaraj to additional investors from their network of family, friends, and co-
workers.  Ramaraj offered Individual A a higher interest rate on his existing investments in
exchange for introducing Ramaraj to new potential investors.
24. Ramaraj generally emailed unexecuted promissory notes to potential investors
along with instructions to wire funds to one of DAB’s bank accounts.
25. Once Ramaraj obtained investors’ money, he generally pooled their funds in
DAB’s bank accounts, signed the promissory notes on behalf of himself individually and on
behalf of DAB as its co-owner and managing member, and returned fully executed copies of the
promissory notes to investors.
26. During meetings with prospective investors, some of which took place in online
video conferences, Ramaraj claimed that: the government required surety and performance bonds
for the contracts for which DAB was bidding; DAB needed outside investment because the
company had exhausted its ability to fund these bonds due to the increased volume of contracts it
had been awarded; and DAB intended to pool investor funds to finance the bonds.  Ramaraj also
touted DAB’s strong financial condition, existing government contracts, and its pipeline of
upcoming projects.  None of Ramaraj’s claims were true.
27. Upon information and belief, Ramaraj knew that DAB had not been awarded any
government contracts and had no realistic prospects for obtaining any contracts.  In fact, as
discussed more fully below, Ramaraj admitted in or about October 2023 that he fabricated many
of DAB’s documents, including purported awarded government contracts, invoices from
subcontractors, and DAB financial statements.

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28. Ramaraj misused investors’ funds to make Ponzi payments to preexisting
investors, for unprofitable personal options trading, and for his daily living expenses.
B.  Ramaraj Fabricates Documents to Induce Investors to Purchase Promissory
      Notes      from      DAB
29. In addition to inducing investors by promising to pay rates of return of 40% and
higher in exchange for the promissory notes, Ramaraj created the illusion that DAB was a
successful and profitable business by fabricating contract awards and work orders from
governmental entities, invoices from subcontractors, and by altering DAB financial records.
30. For example, Ramaraj provided prospective investors with a February 2022
Contract Award from the Federal Aviation Administration (“FAA”), purporting to show that
DAB had been retained to provide construction management, quality assurance, and engineering
services for regional airport design and construction in Maryland, Virginia, and the District of
Columbia.
31. The purported contract reflected that DAB would receive $5,800,000 for its
services and was required to post a refundable $580,000 performance bond.  This contract,
however, was a fake.  Ramaraj later admitted that he intentionally fabricated the FAA contract.
32. Ramaraj also provided prospective investors with multiple invoices purportedly
issued by a Richmond-based engineering and inspection firm (“Engineering Firm”), for work
performed by its inspectors on DAB’s government infrastructure contracts.  Ramaraj presented
the invoices, which appeared to bill DAB substantial amounts between approximately $2 and $4
million per month, as evidence of DAB’s ongoing work on various large-scale infrastructure
projects.
33. The Engineering Firm, as Ramaraj knew, never worked with DAB or Ramaraj.
Ramaraj later admitted to intentionally fabricating invoices from the Engineering Firm.

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34. During a meeting in or about September 2022, Ramaraj presented investors and
prospective investors with a DAB balance sheet dated July 2022 that falsely reported $6.5
million in bond deposit payments.
35. The bond deposit payments, however, did not exist and were not legitimate assets
of DAB.  Listing bond deposits on the balance sheet served only to perpetuate Ramaraj’s scheme
to induce new investments and assuage existing investors that their money had been used as
promised.
36. The DAB balance sheet also falsely reported that DAB had total bank account
assets of $1,320,080.  One of DAB’s bank accounts listed on the balance sheet as having over
$600,000 in fact had no funds since December 2020.  A second bank account listed on the
balance sheet as having $236,000 only had $9,200, and never had a balance over $52,000
throughout July 2022.
C. Ramaraj Solicits Additional Investment from Existing Investors After
Making Ponzi Payments
37. Between in or about July 2019 and March 2024, Ramaraj paid existing investors
approximately $19.6 million in Ponzi payments.  None of these payments came from revenue
from the claimed government contracts, but instead were made primarily with other investors’
money.  Several investors made additional investments in DAB after receiving the promised
interest payments.
38. For example, in or about June 2022, an individual residing in Virginia
(“Individual C”) attended a pitch meeting during which Ramaraj stated that he was raising funds
for government contracts awarded to DAB.  After attending the meeting, Individual C decided to
invest with DAB.

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39. In June 2022 and September 2022, Individual C invested in two promissory notes
with DAB with annualized interest rates of 42% and 60%, respectively.  Ramaraj signed both
promissory notes, which provided for monthly interest payments and the return of the investment
principal after two years, in favor of Individual C’s spouse.
40. On or about July 13, 2022, Individual C wired approximately $200,000 to a DAB
bank account for the purchase of the first promissory note.  On or about July 14, 2022, Ramaraj
transferred $150,000 from that same DAB bank account to his personal trading account with a
U.S.-based brokerage firm.
41. In or about June 2023, Individual C attended another pitch meeting during which
Ramaraj told investors that DAB was expecting more than $200 million in contracts.
42. At this meeting, Ramaraj showed investors purported DAB financial statements
and invoices and required investors to sign non-disclosure agreements that purported to prohibit
investors from sharing information contained in those documents with any third party.
43. In or about July 2023, Individual C, who had received the interest payments
pursuant to the terms of the first two promissory notes, invested in a third promissory note with
DAB.
44. On or about July 28, 2023, Individual C wired $200,000 to a DAB bank account
for the purchase of an additional note.  That same day, Ramaraj paid an existing investor $75,000
in a required interest payment from the same DAB account.
45. Individual C did not receive any interest payments from Ramaraj after September
2023.

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D. Ramaraj Fails to Make Interest Payments and Admits to Fabricating
            Documents
46. In or about August 2023, at an investor meeting, Ramaraj admitted that he lied,
and that DAB had not won all the contracts he had previously claimed.  Ramaraj promised to
return investor funds within a few months.
47. In or about October 2023, Ramaraj held another investor meeting at DAB’s
offices during which he told investors that DAB’s business was struggling, and that DAB would
be unable to pay interest going forward.  Ramaraj further stated that he would return the
investors’ principal by January 2024.
48. In or about October 2023, Individual A and Individual B confronted Ramaraj and
he admitted that he altered and fabricated certain documents concerning DAB.
49. On or about October 22, 2023, Ramaraj signed a document titled
“Acknowledgment,” in which he admitted that he “knowingly and intentionally falsified,
fabricated, and tampered with various financial statements and documents of DAB Inspecting
and Consulting Services, LLC from time to time.”
50. The Acknowledgement listed 23 documents that Ramaraj admitted to fabricating
or altering, including certain bank statements, purported contract awards from state and federal
transportation departments, work orders from an infrastructure project, and numerous invoices
from the Engineering Firm.
51. The Acknowledgment also listed five falsified DAB accounting documents,
including accounts receivable, accounts payable, and profit and loss statements for the years
2021 and 2022, as well as false federal and state tax returns for DAB for the year 2022.

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52. Ramaraj had shown certain of the fabricated documents listed in the
Acknowledgement to prospective investors, including Individual A and Individual B, when
soliciting investments in DAB through the promissory notes.
53. Ramaraj gave Individual A and Individual B a copy of the signed
Acknowledgement and they, in turn, promised not to share the Acknowledgment with anyone.
E. Ramaraj’s Misuse of Investors’ Funds
54. Between in or about February 2019 and February 2024, Ramaraj raised
approximately $31 million from over 70 investors in Virginia, North Carolina, Ohio, New
Jersey, Georgia, and Texas.
55. Contrary to his express representations to investors, Ramaraj did not use
investors’ funds for surety and performance bonds.  In fact, those bonds did not exist.  Instead, of
the $31 million he raised from investors, Ramaraj used approximately $19.6 million to make
Ponzi payments to existing investors and transferred over $6 million to personal brokerage
accounts where he lost the majority through speculative options trading.
56. Additionally, Ramaraj also used investor funds to make various personal
expenditures, including $292,000 to acquire various properties, more than $194,000 on domestic
and international travel, approximately $188,000 on luxury automobiles, and more than $70,000
on jewelry.
57. Ramaraj did not return investor funds as promised and continued to solicit new
investors through May 2024, even after admitting to certain earlier investors that he had lied and
fabricated documents.

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II.        DEFENDANT        RAMARAJ VIOLATED THE FEDERAL SECURITIES LAWS
58. At all relevant times, Ramaraj operated and controlled DAB and bank accounts in
DAB’s name.
59. The promissory notes sold by Ramaraj were securities within the meaning of the
Securities Act and the Exchange Act.  Investors provided Ramaraj with an investment of
money—more than 70 investors gave Ramaraj over $31 million, and investors made their
investment with a reasonable expectation of profits to be derived solely from Ramaraj’s
supposed ability to generate profits through his operation of DAB without any participation by
any of its investors.
60. Ramaraj pooled investors’ money into bank accounts and represented that he
would use those funds to obtain bonds required for DAB’s lucrative government contracts.
Instead, he misappropriated investors’ funds to repay existing investors and for his personal use.
61. Ramaraj engaged in the conduct described herein, including the offer and sale of
the securities in the form of promissory notes, by use of the means or instruments of
transportation or communication in interstate commerce, the instrumentalities of interstate
commerce, and/or by use of the mails.  Ramaraj offered and sold the promissory notes to
investors in several states using the internet and online video conferencing platforms.
62. Ramaraj knowingly made material untrue statements and omitted to state material
facts necessary in order to make the statements made, in light of the circumstances under which
they were made, not misleading.
63. Ramaraj also knowingly fabricated and altered documents to make DAB appear
to be a profitable and successful business to deceive investors and convince them to purchase
DAB promissory notes.

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64. A reasonable investor would consider the misrepresented facts and omitted
information described herein—including, among other things, misrepresentations, omissions, and
fabricated documents regarding the existence of DAB’s lucrative contracts and the use of
investors’ funds—important in deciding whether to purchase the promissory notes.
65. In connection with the conduct described herein, Ramaraj knew or was reckless in
not knowing that he was making material misrepresentations and omitting to state material facts
necessary to make certain statements not misleading under the circumstances.
66. Ramaraj used devices, schemes, and artifices to defraud investors, and engaged in
acts, transactions, practices, or courses of business that operated as a fraud or deceit upon the
investors.  In addition to the numerous misrepresentations discussed herein, among other things,
Ramaraj fabricated documents, misled investors, and misappropriated investors’ funds for his
personal use and benefit.
FIRST CLAIM FOR RELIEF
Violations of Section 17(a) of the Securities Act

67. The Commission realleges and incorporates by reference each and every
allegation in paragraphs 1 through 66, above, as if the same were fully set forth herein.
68. From in or about February 2019 through May 2024, as a result of the conduct
alleged herein, Defendant Ramaraj, directly or indirectly, singly or in concert, in the offer or sale
of securities and by the use of the means or instruments of transportation or communication in
interstate commerce or the mails, (i) knowingly or recklessly has employed one or more devices,
schemes or artifices to defraud, (ii) knowingly, recklessly, or negligently has obtained money or
property by means of one or more untrue statements of a material fact or omissions of a material
fact necessary in order to make the statements made, in light of the circumstances under which
they were made, not misleading, and (iii) knowingly, recklessly, or negligently has engaged one

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or more transactions, practices, or courses of business which operated or would operate as a
fraud or deceit upon the purchaser.
69. By engaging in the foregoing conduct, Defendant Ramaraj, directly or indirectly,
singly or in concert, has violated and, unless enjoined, will again violate Securities Act Section
17(a) [15 U.S.C. § 77q(a)].
SECOND CLAIM FOR RELIEF
Violations of Section 10(b) of the Exchange Act and Rule 10b-5 Thereunder
70. The Commission realleges and incorporates by reference each and every
allegation in paragraphs 1 through 66, above, as if the same were fully set forth herein.
71. From in or about February 2019 through May 2024, as a result of the conduct
alleged herein, Defendant Ramaraj, directly or indirectly, singly or in concert, in connection with
the purchase or sale of securities and by the use of means or instrumentalities of interstate
commerce, or the mails, or the facilities of a national securities exchange, knowingly or
recklessly has: (i) employed one or more devices, schemes, or artifices to defraud; (ii) made one
or more untrue statements of a material fact or omitted to state one or more material facts
necessary in order to make the statements made, in light of the circumstances under which they
were made, not misleading; and (iii) engaged in one or more acts, practices, or courses of
business which operated or would operate as a fraud or deceit upon other persons.
72. By engaging in the foregoing conduct, Defendant Ramaraj, directly or indirectly,
singly or in concert, violated and, unless enjoined, will again violate Exchange Act Section 10(b)
[15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].

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PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that this Court enter a final
judgment:
I.
Permanently restraining and enjoining Ramaraj and his agents, servants, employees and
attorneys and all persons in active concert or participation with any of them from violating,
directly or indirectly, Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)] and Section 10(b)
of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5];
II.
Ordering Defendant Ramaraj to disgorge any and all ill-gotten gains, together with
prejudgment interest, derived from the activities set forth in this Complaint;
III.
 Ordering Defendant Ramaraj to pay a civil penalty pursuant to Section 20(d) of the
Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. §
78u(d)(3)];
IV.
 Entering an order pursuant to Section 21(d)(2) of the Exchange Act [15 U.S.C. §
78u(d)(2)] prohibiting Defendant Ramaraj from acting as an officer or director of any issuer that
has a class of securities registered pursuant to Section 12 of the Exchange Act [15 U.S.C. § 78l]
or that is required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. §
78o(d)]; and
V.
 Granting such other and further relief as the Court may deem just and appropriate.

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JURY DEMAND
 The Commission demands a jury in this matter for all claims so triable.
DATED this 25th day of July 2024.
Respectfully submitted,

SECURITIES & EXCHANGE COMMISSION

/s/            Eugene            Hansen
Eugene Hansen (VSB No. 48357)
Securities & Exchange Commission
100 F Street, NE
Washington DC 20549-5977
Telephone: 202-551-6091
Email: [email protected]
Fax number: 202-772-9245

Karen M. Klotz (Pro hac vice to be filed)
Judson T. Mihok (Pro hac vice to be filed)
Gregory R. Bockin
Brendan P. McGlynn
Christine R. O’Neil
Matthew Homberger
Philadelphia Regional Office
One Penn Center
1617 JFK Boulevard, Suite 520
Philadelphia, PA 19103
Telephone: (215) 597-3100
Email: [email protected]
Email: [email protected]

IN THE UNITED STATES DISTRICT COURT 
FOR THE EASTERN DISTRICT OF VIRGINIA 

ALEXANDRIA DIVISION 
 
  

SECURITIES AND EXCHANGE COMMISSION,  
 Case No. _______________ 

Plaintiff,  
 JURY TRIAL DEMANDED 
v.  
 
BABU RAMARAJ, 
 

 

Defendant.  
  

 
COMPLAINT 

Plaintiff Securities and Exchange Commission (the “Commission”) files this Complaint 

against defendant Babu Ramaraj (“Ramaraj” or “Defendant”) and alleges as follows: 

SUMMARY 

1. This matter concerns an offering fraud conducted by Ramaraj through his 

company, DAB Inspection and Consulting Services, LLC (“DAB”), a civil engineering and 

consulting company based in Sterling, Virginia. 

2. From in or about February 2019 through May 2024, Ramaraj raised 

approximately $31 million from over 70 investors through the fraudulent offer and sale of 

securities in the form of promissory notes.  

3. Ramaraj promised exorbitant rates of return and told prospective investors that he 

would use their funds to finance surety and performance bonds required to guarantee DAB’s 

performance of quality assurance services for government-sponsored multi-million-dollar 

infrastructure projects.   

24-cv-1282

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4. Ramaraj deceived investors by making materially false and misleading statements 

and omissions concerning the existence of lucrative government contracts, DAB’s financial 

condition, and Ramaraj’s intended use of investor proceeds.   

5. To induce investments and disguise his misconduct, Ramaraj fabricated over 20 

documents, including purported government contract awards, invoices, and DAB’s financial 

statements. 

6. In reality, DAB had not won any of the promised government contracts, and 

Ramaraj did not use investor proceeds for bonds as promised.  Instead, Ramaraj used most of the 

proceeds to fund interest payments to earlier investors (“Ponzi” payments) and for his personal 

benefit. 

7. As DAB and Ramaraj became unable to pay interest and principal on the 

promissory notes in the fall of 2023, Ramaraj admitted to some investors that DAB had not been 

awarded certain government contracts he touted and to two other investors that he had fabricated 

a number of contract awards, invoices, and bank statements.   

VIOLATIONS AND RELIEF SOUGHT 

8. By engaging in the conduct described in this Complaint, Ramaraj violated, and 

unless enjoined will continue to violate, Section 17(a) of the Securities Act of 1933 (“Securities 

Act”) [15 U.S.C. § 77q(a)] and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange 

Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].   

9. The Commission seeks to permanently enjoin Ramaraj from violating these laws 

again; disgorgement of ill-gotten gains derived from his unlawful activity, with prejudgment 

interest; civil penalties pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and 

Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)]; an order prohibiting Ramaraj 

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from serving as an officer or director pursuant to Section 20(e) of the Securities Act [15 U.S.C. § 

77t(e)] and Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)]; and other relief the 

Court may deem just and appropriate.  

10. Unless Ramaraj is restrained and enjoined, he will again engage in the acts, 

practices, transactions, and courses of business set forth in this Complaint or in acts, practices, 

transactions, and courses of business of similar type and object. 

JURISDICTION AND VENUE 

11. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d), and 

22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d), and 77v(a)] and Sections 21(d), 21(e), 

and 27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa]. 

12. The Court has personal jurisdiction over Ramaraj.  Ramaraj resides and transacts 

business in the Eastern District of Virginia and many of his acts and transactions constituting 

violations of the Securities Act and Exchange Act occurred in Loudoun County in the Eastern 

District of Virginia. 

13. Venue in this District is proper pursuant to Section 22(a) of the Securities Act [15 

U.S.C. § 77v(a)] and Section 27 of the Exchange Act [15 U.S.C. § 78aa].  Defendant Ramaraj 

resided in Loudoun County at all times relevant to this Complaint, and DAB’s principal place of 

business was in Loudoun County.  In addition, certain of the acts, practices, and courses of 

business constituting the violations of the federal securities laws alleged herein occurred within 

Loudoun County in the Eastern District of Virginia.  

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14. In connection with the conduct alleged in this Complaint, Ramaraj, directly or 

indirectly, singly or in concert with others, made use of the means or instrumentalities of 

interstate commerce, the means and instruments of transportation or communication in interstate 

commerce, or the mails, or any facility of any national securities exchange, including using the 

internet to email victim investors.  Wire transfers were also used to transfer funds to further 

Ramaraj’s scheme.  

DEFENDANT 

15. Babu Ramaraj, age 47, is a resident of Aldie, Virginia.  Ramaraj is the principal 

and 47% owner of DAB, a purported oil and gas consulting company with its principal place of 

business in Sterling, Virginia.  From in or about June 2006 to March 2024, Ramaraj was licensed 

as a professional engineer in Virginia. 

RELEVANT ENTITY 

16. DAB Inspection and Consulting Services, LLC is a Virginia limited liability 

with its principal place of business in Sterling, Virginia.  Ramaraj originally formed DAB in 

2015 to perform residential construction and inspection services.  Upon information and belief, 

since in or around 2019, Ramaraj has used DAB as a sham quality assurance business to 

perpetrate the fraud described in this Complaint.    

17. Ramaraj is a 47% owner of DAB, controlled the company’s day-to-day 

operations, and exercised complete control over DAB’s bank accounts and books and records.  

Ramaraj also had complete control over the use of investors’ funds. 

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FACTS 

I. DEFENDANT RAMARAJ FRAUDULENTLY INDUCED INVESTORS TO BUY 
PROMISSORY NOTES 

 A. Overview of Ramaraj’s Fraudulent Promissory Note Offering 

18. From in or about February 2019 through May 2024, Ramaraj orchestrated a 

scheme through which he raised approximately $31 million from over 70 investors through the 

offer and sale of promissory notes.  

19. Ramaraj solicited investors from members of his local cricket league in Northern 

Virginia, their friends and family members, and other acquaintances.   

20. Ramaraj falsely told prospective investors that his company, DAB, had been 

awarded lucrative contracts to provide quality assurance services largely to state and local 

governments, including the Commonwealth of Virginia and the District of Columbia, and needed 

to raise capital to cover surety and performance bonds required for these purported contracts.  

21. Ramaraj did not disclose to prospective investors his intention to use investors’ 

funds for other purposes, such as to make repayments to other investors and pay personal 

expenses. 

22. In exchange for providing DAB with funds for the purported bonds, Ramaraj and 

DAB executed promissory notes in favor of the investors.  The promissory notes typically 

carried two or three-year terms and provided for high fixed rates of monthly interest payments 

with annualized returns of between approximately 40% and 60% and the principal returned at 

maturity. 

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23. Two of Ramaraj’s earlier investors (“Individual A” and “Individual B”) 

introduced Ramaraj to additional investors from their network of family, friends, and co-

workers.  Ramaraj offered Individual A a higher interest rate on his existing investments in 

exchange for introducing Ramaraj to new potential investors. 

24. Ramaraj generally emailed unexecuted promissory notes to potential investors 

along with instructions to wire funds to one of DAB’s bank accounts. 

25. Once Ramaraj obtained investors’ money, he generally pooled their funds in 

DAB’s bank accounts, signed the promissory notes on behalf of himself individually and on 

behalf of DAB as its co-owner and managing member, and returned fully executed copies of the 

promissory notes to investors.  

26. During meetings with prospective investors, some of which took place in online 

video conferences, Ramaraj claimed that: the government required surety and performance bonds 

for the contracts for which DAB was bidding; DAB needed outside investment because the 

company had exhausted its ability to fund these bonds due to the increased volume of contracts it 

had been awarded; and DAB intended to pool investor funds to finance the bonds.  Ramaraj also 

touted DAB’s strong financial condition, existing government contracts, and its pipeline of 

upcoming projects.  None of Ramaraj’s claims were true.   

27. Upon information and belief, Ramaraj knew that DAB had not been awarded any 

government contracts and had no realistic prospects for obtaining any contracts.  In fact, as 

discussed more fully below, Ramaraj admitted in or about October 2023 that he fabricated many 

of DAB’s documents, including purported awarded government contracts, invoices from 

subcontractors, and DAB financial statements.   

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28. Ramaraj misused investors’ funds to make Ponzi payments to preexisting 

investors, for unprofitable personal options trading, and for his daily living expenses. 

B. Ramaraj Fabricates Documents to Induce Investors to Purchase Promissory  
 Notes from DAB 

29. In addition to inducing investors by promising to pay rates of return of 40% and 

higher in exchange for the promissory notes, Ramaraj created the illusion that DAB was a 

successful and profitable business by fabricating contract awards and work orders from 

governmental entities, invoices from subcontractors, and by altering DAB financial records.   

30. For example, Ramaraj provided prospective investors with a February 2022 

Contract Award from the Federal Aviation Administration (“FAA”), purporting to show that 

DAB had been retained to provide construction management, quality assurance, and engineering 

services for regional airport design and construction in Maryland, Virginia, and the District of 

Columbia.   

31. The purported contract reflected that DAB would receive $5,800,000 for its 

services and was required to post a refundable $580,000 performance bond.  This contract, 

however, was a fake.  Ramaraj later admitted that he intentionally fabricated the FAA contract.    

32. Ramaraj also provided prospective investors with multiple invoices purportedly 

issued by a Richmond-based engineering and inspection firm (“Engineering Firm”), for work 

performed by its inspectors on DAB’s government infrastructure contracts.  Ramaraj presented 

the invoices, which appeared to bill DAB substantial amounts between approximately $2 and $4 

million per month, as evidence of DAB’s ongoing work on various large-scale infrastructure 

projects. 

33. The Engineering Firm, as Ramaraj knew, never worked with DAB or Ramaraj.  

Ramaraj later admitted to intentionally fabricating invoices from the Engineering Firm.   

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34. During a meeting in or about September 2022, Ramaraj presented investors and 

prospective investors with a DAB balance sheet dated July 2022 that falsely reported $6.5 

million in bond deposit payments. 

35. The bond deposit payments, however, did not exist and were not legitimate assets 

of DAB.  Listing bond deposits on the balance sheet served only to perpetuate Ramaraj’s scheme 

to induce new investments and assuage existing investors that their money had been used as 

promised.  

36. The DAB balance sheet also falsely reported that DAB had total bank account 

assets of $1,320,080.  One of DAB’s bank accounts listed on the balance sheet as having over 

$600,000 in fact had no funds since December 2020.  A second bank account listed on the 

balance sheet as having $236,000 only had $9,200, and never had a balance over $52,000 

throughout July 2022.   

C. Ramaraj Solicits Additional Investment from Existing Investors After 
Making Ponzi Payments 

37. Between in or about July 2019 and March 2024, Ramaraj paid existing investors 

approximately $19.6 million in Ponzi payments.  None of these payments came from revenue 

from the claimed government contracts, but instead were made primarily with other investors’ 

money.  Several investors made additional investments in DAB after receiving the promised 

interest payments.   

38. For example, in or about June 2022, an individual residing in Virginia 

(“Individual C”) attended a pitch meeting during which Ramaraj stated that he was raising funds 

for government contracts awarded to DAB.  After attending the meeting, Individual C decided to 

invest with DAB. 

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39. In June 2022 and September 2022, Individual C invested in two promissory notes 

with DAB with annualized interest rates of 42% and 60%, respectively.  Ramaraj signed both 

promissory notes, which provided for monthly interest payments and the return of the investment 

principal after two years, in favor of Individual C’s spouse. 

40. On or about July 13, 2022, Individual C wired approximately $200,000 to a DAB 

bank account for the purchase of the first promissory note.  On or about July 14, 2022, Ramaraj 

transferred $150,000 from that same DAB bank account to his personal trading account with a 

U.S.-based brokerage firm. 

41. In or about June 2023, Individual C attended another pitch meeting during which 

Ramaraj told investors that DAB was expecting more than $200 million in contracts.   

42. At this meeting, Ramaraj showed investors purported DAB financial statements 

and invoices and required investors to sign non-disclosure agreements that purported to prohibit 

investors from sharing information contained in those documents with any third party.   

43. In or about July 2023, Individual C, who had received the interest payments 

pursuant to the terms of the first two promissory notes, invested in a third promissory note with 

DAB.   

44. On or about July 28, 2023, Individual C wired $200,000 to a DAB bank account 

for the purchase of an additional note.  That same day, Ramaraj paid an existing investor $75,000 

in a required interest payment from the same DAB account.   

45. Individual C did not receive any interest payments from Ramaraj after September 

2023.  

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D. Ramaraj Fails to Make Interest Payments and Admits to Fabricating 
 Documents 

46. In or about August 2023, at an investor meeting, Ramaraj admitted that he lied, 

and that DAB had not won all the contracts he had previously claimed.  Ramaraj promised to 

return investor funds within a few months.   

47. In or about October 2023, Ramaraj held another investor meeting at DAB’s 

offices during which he told investors that DAB’s business was struggling, and that DAB would 

be unable to pay interest going forward.  Ramaraj further stated that he would return the 

investors’ principal by January 2024.   

48. In or about October 2023, Individual A and Individual B confronted Ramaraj and 

he admitted that he altered and fabricated certain documents concerning DAB. 

49. On or about October 22, 2023, Ramaraj signed a document titled 

“Acknowledgment,” in which he admitted that he “knowingly and intentionally falsified, 

fabricated, and tampered with various financial statements and documents of DAB Inspecting 

and Consulting Services, LLC from time to time.”  

50. The Acknowledgement listed 23 documents that Ramaraj admitted to fabricating 

or altering, including certain bank statements, purported contract awards from state and federal 

transportation departments, work orders from an infrastructure project, and numerous invoices 

from the Engineering Firm.   

51. The Acknowledgment also listed five falsified DAB accounting documents, 

including accounts receivable, accounts payable, and profit and loss statements for the years 

2021 and 2022, as well as false federal and state tax returns for DAB for the year 2022. 

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52. Ramaraj had shown certain of the fabricated documents listed in the 

Acknowledgement to prospective investors, including Individual A and Individual B, when 

soliciting investments in DAB through the promissory notes. 

53. Ramaraj gave Individual A and Individual B a copy of the signed 

Acknowledgement and they, in turn, promised not to share the Acknowledgment with anyone. 

E. Ramaraj’s Misuse of Investors’ Funds 

54. Between in or about February 2019 and February 2024, Ramaraj raised 

approximately $31 million from over 70 investors in Virginia, North Carolina, Ohio, New 

Jersey, Georgia, and Texas. 

55. Contrary to his express representations to investors, Ramaraj did not use 

investors’ funds for surety and performance bonds.  In fact, those bonds did not exist.  Instead, of 

the $31 million he raised from investors, Ramaraj used approximately $19.6 million to make 

Ponzi payments to existing investors and transferred over $6 million to personal brokerage 

accounts where he lost the majority through speculative options trading.   

56. Additionally, Ramaraj also used investor funds to make various personal 

expenditures, including $292,000 to acquire various properties, more than $194,000 on domestic 

and international travel, approximately $188,000 on luxury automobiles, and more than $70,000 

on jewelry. 

57. Ramaraj did not return investor funds as promised and continued to solicit new 

investors through May 2024, even after admitting to certain earlier investors that he had lied and 

fabricated documents. 

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II. DEFENDANT RAMARAJ VIOLATED THE FEDERAL SECURITIES LAWS  

58. At all relevant times, Ramaraj operated and controlled DAB and bank accounts in 

DAB’s name. 

59. The promissory notes sold by Ramaraj were securities within the meaning of the 

Securities Act and the Exchange Act.  Investors provided Ramaraj with an investment of 

money—more than 70 investors gave Ramaraj over $31 million, and investors made their 

investment with a reasonable expectation of profits to be derived solely from Ramaraj’s 

supposed ability to generate profits through his operation of DAB without any participation by 

any of its investors. 

60. Ramaraj pooled investors’ money into bank accounts and represented that he 

would use those funds to obtain bonds required for DAB’s lucrative government contracts.  

Instead, he misappropriated investors’ funds to repay existing investors and for his personal use. 

61. Ramaraj engaged in the conduct described herein, including the offer and sale of 

the securities in the form of promissory notes, by use of the means or instruments of 

transportation or communication in interstate commerce, the instrumentalities of interstate 

commerce, and/or by use of the mails.  Ramaraj offered and sold the promissory notes to 

investors in several states using the internet and online video conferencing platforms. 

62. Ramaraj knowingly made material untrue statements and omitted to state material 

facts necessary in order to make the statements made, in light of the circumstances under which 

they were made, not misleading. 

63. Ramaraj also knowingly fabricated and altered documents to make DAB appear 

to be a profitable and successful business to deceive investors and convince them to purchase 

DAB promissory notes. 

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64. A reasonable investor would consider the misrepresented facts and omitted 

information described herein—including, among other things, misrepresentations, omissions, and 

fabricated documents regarding the existence of DAB’s lucrative contracts and the use of 

investors’ funds—important in deciding whether to purchase the promissory notes. 

65. In connection with the conduct described herein, Ramaraj knew or was reckless in 

not knowing that he was making material misrepresentations and omitting to state material facts 

necessary to make certain statements not misleading under the circumstances. 

66. Ramaraj used devices, schemes, and artifices to defraud investors, and engaged in 

acts, transactions, practices, or courses of business that operated as a fraud or deceit upon the 

investors.  In addition to the numerous misrepresentations discussed herein, among other things, 

Ramaraj fabricated documents, misled investors, and misappropriated investors’ funds for his 

personal use and benefit. 

FIRST CLAIM FOR RELIEF 
Violations of Section 17(a) of the Securities Act 

 
67. The Commission realleges and incorporates by reference each and every 

allegation in paragraphs 1 through 66, above, as if the same were fully set forth herein. 

68. From in or about February 2019 through May 2024, as a result of the conduct 

alleged herein, Defendant Ramaraj, directly or indirectly, singly or in concert, in the offer or sale 

of securities and by the use of the means or instruments of transportation or communication in 

interstate commerce or the mails, (i) knowingly or recklessly has employed one or more devices, 

schemes or artifices to defraud, (ii) knowingly, recklessly, or negligently has obtained money or 

property by means of one or more untrue statements of a material fact or omissions of a material 

fact necessary in order to make the statements made, in light of the circumstances under which 

they were made, not misleading, and (iii) knowingly, recklessly, or negligently has engaged one 

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or more transactions, practices, or courses of business which operated or would operate as a 

fraud or deceit upon the purchaser.  

69. By engaging in the foregoing conduct, Defendant Ramaraj, directly or indirectly, 

singly or in concert, has violated and, unless enjoined, will again violate Securities Act Section 

17(a) [15 U.S.C. § 77q(a)]. 

SECOND CLAIM FOR RELIEF 
Violations of Section 10(b) of the Exchange Act and Rule 10b-5 Thereunder 

70. The Commission realleges and incorporates by reference each and every 

allegation in paragraphs 1 through 66, above, as if the same were fully set forth herein. 

71. From in or about February 2019 through May 2024, as a result of the conduct 

alleged herein, Defendant Ramaraj, directly or indirectly, singly or in concert, in connection with 

the purchase or sale of securities and by the use of means or instrumentalities of interstate 

commerce, or the mails, or the facilities of a national securities exchange, knowingly or 

recklessly has: (i) employed one or more devices, schemes, or artifices to defraud; (ii) made one 

or more untrue statements of a material fact or omitted to state one or more material facts 

necessary in order to make the statements made, in light of the circumstances under which they 

were made, not misleading; and (iii) engaged in one or more acts, practices, or courses of 

business which operated or would operate as a fraud or deceit upon other persons. 

72. By engaging in the foregoing conduct, Defendant Ramaraj, directly or indirectly, 

singly or in concert, violated and, unless enjoined, will again violate Exchange Act Section 10(b) 

[15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

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PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that this Court enter a final 

judgment: 

I. 

Permanently restraining and enjoining Ramaraj and his agents, servants, employees and 

attorneys and all persons in active concert or participation with any of them from violating, 

directly or indirectly, Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)] and Section 10(b) 

of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5];  

II. 

Ordering Defendant Ramaraj to disgorge any and all ill-gotten gains, together with 

prejudgment interest, derived from the activities set forth in this Complaint; 

III. 

 Ordering Defendant Ramaraj to pay a civil penalty pursuant to Section 20(d) of the 

Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 

78u(d)(3)]; 

IV. 

 Entering an order pursuant to Section 21(d)(2) of the Exchange Act [15 U.S.C. § 

78u(d)(2)] prohibiting Defendant Ramaraj from acting as an officer or director of any issuer that 

has a class of securities registered pursuant to Section 12 of the Exchange Act [15 U.S.C. § 78l] 

or that is required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. § 

78o(d)]; and 

V. 

 Granting such other and further relief as the Court may deem just and appropriate. 

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JURY DEMAND 

 The Commission demands a jury in this matter for all claims so triable. 

DATED this 25th day of July 2024.  

Respectfully submitted, 
 

  
SECURITIES & EXCHANGE COMMISSION 
 
/s/ Eugene Hansen     
Eugene Hansen (VSB No. 48357) 
Securities & Exchange Commission 
100 F Street, NE 
Washington DC 20549-5977        
Telephone: 202-551-6091 
Email: [email protected] 
Fax number: 202-772-9245 

Karen M. Klotz (Pro hac vice to be filed) 
Judson T. Mihok (Pro hac vice to be filed)  
Gregory R. Bockin 
Brendan P. McGlynn 
Christine R. O’Neil 
Matthew Homberger 
Philadelphia Regional Office 
One Penn Center 
1617 JFK Boulevard, Suite 520 
Philadelphia, PA 19103 
Telephone: (215) 597-3100 
Email: [email protected] 
Email: [email protected] 

 

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