Mukund Mohan, the chief technology officer of Vancouver-based BuildDirect, was arrested last week in Washington state, where he lives, and charged with one count of wire fraud and one count of money laundering. In one application, Mohan said one of his companies paid more than $2.3 million for payroll in 2019 and that the company had dozens of employees, according to the indictment. In reality, Mohan acquired ownership of the company in May, and it had no employees, according to the US Attorney in Washington. Robinhood Markets Inc. provided records showing an account belonging to Mohan transferred about $231,000 of the federal money to the stock-trading app, prosecutors said.

By  DESIBUZZCanada Staff With News Files

VANCOUVER – - An ex-Microsoft Executive who is a  top man at a prominent Vancouver tech company has been arrested and charged with fraud for allegedly seeking millions of dollars through a U.S. government COVID-relief Paycheck Protection Program (PPP) and laundering the proceeds.

Mukund Mohan, the chief technology officer of Vancouver-based BuildDirect, was arrested last week in Washington state, where he lives, and charged with one count of wire fraud and one count of money laundering.

Mohan is accused of putting some of the money into his personal Robinhood brokerage account.

Mohan allegedly applied for eight loans to six companies through the Paycheck Protection Program, a federal stimulus designed to encourage small businesses to keep workers employed during the coronavirus pandemic.

Mohan previously worked for Amazon.com Inc. and Microsoft Corp., according to Mohan’s LinkedIn profile. Mohan and representatives for the companies didn’t immediately respond to requests for comment.

The federal loan documents Mohan submitted allegedly contained a multitude of falsehoods, prosecutors said. In one application, Mohan said one of his companies paid more than $2.3 million for payroll in 2019 and that the company had dozens of employees, according to the indictment. In reality, Mohan acquired ownership of the company in May, and it had no employees, according to the US Attorney in Washington.

Robinhood Markets Inc. provided records showing an account belonging to Mohan transferred about $231,000 of the federal money to the stock-trading app, prosecutors said.

Mohan, who studied Computer Science in the University of Mysore, India  and who later turned into an entrepreneur and a start-up guy, became a popular face in Bengaluru’s startup ecosystem when he moved here from the US in 2008, first to start a venture of his own and then to lead Microsoft’s startup accelerator program. 

One of the companies he applied for a loan was called Mahenjo. The complaint alleges that Mohan made false and misleading statements about it, including that on Feb. 15, 2020, the company was in operation and had employees for whom it paid salaries and payroll taxes or paid independent contractors. He allegedly claimed that in 2019, Mahenjo’s payroll expenses were more than 2.3 million dollars and that Mahenjo’s average monthly pay expenses were 172,250 dollars. The complaint says Mahenjo was actually a shell company.

The court documents identify Mohan as the CTO of BuildDirect, although none of the allegations appear to involve the Vancouver-based company, an online seller of flooring and other home improvement products which was, at one time, celebrated as one of Vancouver’s top tech companies and reportedly worth almost half-a-billion dollars. Mohan, whose bio on BuildDirect’s website describes him as a “serial entrepreneur,” is alleged to have filed bogus applications on behalf of six other companies he controlled, unrelated to BuildDirect.

The allegations centre around Zigantic LLC, a company for which Mohan’s wife is listed as the founder, and five other companies where Mohan is listed as founder, CEO or owner: Mahenjo Inc., Zuput Inc., GitGrow Inc., Vangal Inc., and Expect Success Inc.

Founded in 1999, BuildDirect’s valuation was, at one point, said to be close to $500 million. In 2014, when BuildDirect secured $50 million in new funding, The Vancouver Sun described the company as having “revolutionized the building supply model by making it as easy to buy flooring and other construction goods as it is to buy a book on Amazon, has seen its valuation more than double in the past year, and it is emerging as one of Vancouver’s new anchor technology companies.”

But by 2017, mounting losses pushed BuildDirect into creditor protection. Around that time, the company’s co-founders departed and then-chief operating officer Dan Park was named CEO. The company emerged from creditor protection in March 2018, and in July of that year, announced the hiring of four new American executives, including Mohan, who was described in a press release at the time as a “successful entrepreneur,” who had founded three companies and sold two.

As of Sunday afternoon, Mohan was still listed on BuildDirect’s website as CTO and the company had not issued any press release or statement about the matter.

BuildDirect CEO Dan Park told Postmedia Sunday that he learned about the charges last Thursday, the day Mohan was arrested. Mohan is still BuildDirect’s CTO, but has been placed on a leave of absence, Park said.

“This is a very serious allegation by the U.S. Department of Justice, but it is an allegation, it’s not a conviction yet,” Park told Postmedia. “But there’s nothing specific for us to respond with respect to that specific allegation. The DOJ did not name us as one of the companies involved in his alleged scheme, nor did any of his alleged activities involve BuildDirect in any way whatsoever.”