FAIRFAX, Va. (WRIC) — A Virginia defense contractor has agreed to repay over $1 million in COVID relief funds after accusations that he used the money to gamble on the stock market and cryptocurrency.
Harish Vajja, CEO of CybeCys Inc., accepted $956,000 in Paycheck Protection Program funds, which were distributed by the government as interest-free, forgiveable loans.
According to federal regulations, the money was intended to “retain workers and maintain payroll or make mortgage interest payments, lease payments and utility payments.” If they were used for those purposes, the loans could be automatically forgiven — essentially making them free money.
But that’s loan forgiveness that Vajja will no longer be able to access, thanks to a settlement he and CybeCys reached with the government this week.
Vajja has not been charged with a crime — and has not admitted to any wrongdoing — but agreed to pay $283,000 in restitution and civil penalties for alleged misconduct.
According to prosecutors, instead of using the pandemic relief funds for their intended purpose, Vajja deposited them in his personal bank account, using them to buy stocks and cryptocurrency.
During that period, they wrote, Vajj continued paying his employees as usual — suggesting the company was not facing significant hardships due to the pandemic.
Now, in addition to the restitution he has already agreed to pay, Vajj and CybeCys will be on the hook to repay the entire balance of his PPP loan and other money from federal relief programs, totaling over $1 million.
