You think having multiple companies protects you. Separate LLCs. Different entities. If one company gets investigated, the others are safe. Your portfolio spreads the risk.
That's not how San Jose works.
Welcome to Spodek Law Group. Our goal is to tell you what other websites won't: in the Northern District of California, your company portfolio becomes your criminal portfolio. Kishore Kethineni ran four tech companies. His brothers ran three more. Seven companies. Twelve PPP applications. $3.1 million in fraud. Prosecutors didn't see seven separate companies with seven separate problems. They saw ONE conspiracy. ONE family. ONE scheme. And the PPP investigation exposed $2 million in unpaid employment taxes from years before the pandemic even started.
If you have multiple companies, if you worked with family members on PPP applications, if your entities are connected in ways prosecutors can trace - San Jose prosecutors will treat your portfolio as evidence of organized crime.
When Your Portfolio Becomes Your Prosecution
Most people in Silicon Valley think in portfolios. You don't run one company - you run several. You don't have one LLC - you have a family of entities. It's normal. It's how business works in the Bay Area.
That's not how federal prosecutors in San Jose see it.
In the Northern District of California, prosecutors treat connected entities as a single criminal enterprise. They aren't looking at each company seperately - they're looking at HOW your companies connect. The family relationships. The shared resources. The patterns of applications. The web of entities that makes fraud possible at scale.
Heres how this works in practice. You have three LLCs. You submitted PPP applications for all of them. You figured each application was independant - one company, one loan, one risk. Wrong. To San Jose prosecutors, three connected applications demonstrate a PATTERN. A scheme. An organized approach to defrauding the government. And organized fraud gets prosecuted as organized crime.
The Northern District of California has demonstrated that multi-entity fraud triggers conspiracy charges. Kishore Kethineni and his brothers ran seven companies. They submitted twelve applications. Prosecutors didn't bring seven cases. They brought ONE conspiracy case that captured everything. The family network became the criminal network.
The more companies you used for PPP applications, the more conspiracy charges you face. San Jose prosecutors don't just see individual frauds. They see patterns. Networks. Enterprises. And they charge acordingly.
The Kethineni Trap: 7 Companies, 1 Conspiracy
Let me show you exactly how a tech portfolio becomes 2 years in federal prison.
Kishore Kethineni of Dublin, California - just north of San Jose in the Bay Area - was the CEO of four software development and IT services companies. BiteGate, Inc. Dinenamics, Inc. Neelinfo, Inc. TechPMC, Inc. His two brothers owned three more companies. Boxstertech, Inc. Hiretechforce, Inc. TechGlobalSystems, Inc. Seven companies total. One family.
OK so what happened? Between April 2020 and May 2021, Kethineni and his brothers submitted at least twelve PPP loan applications across there seven companies. They made fraudulent representations. They provided falsified payroll data. They submitted fake records to obtain loans and loan forgiveness.
The result? Nine of those applications were approved. The family obtained over $3.1 million in PPP funds. Money that was supposed to go to payroll. Money that was supposed to keep employees paid during the pandemic. Instead, Kethineni redirected significant amounts to himself and his family members.
Heres the part that should terrify you. Prosecutors didn't just find the PPP fraud. They found everything else Kethineni had been hiding. While investigating the PPP applications, they discovered that Kethineni had been failing to pay employment taxes for years. From 2014 through 2018 - years before PPP even existed - Kethineni had withheld taxes from his Neelinfo employees but never paid them to the IRS. The employment tax liability totaled over $2 million.
Think about what this means. Kethineni thought he was commiting PPP fraud. He was actualy exposing years of tax evasion. The PPP investigation gave prosecutors access to his entire financial history. They saw the tax forms that were never filed. They saw the withholdings that were never paid. They saw five years of deliberate evasion that had nothing to do with the pandemic.
The sentence? Two years in federal prison. But the financial consequences were far worse. Kethineni was ordered to pay $3,295,514.25 in restitution. He forfeited $3,186,315.00. He paid a $15,000 fine. And he faces two years of supervised release after prison. The total financial exposure exceeded $6.5 million - more then double what he stole through PPP.
The investigation revealed the full scope of Kethineni's financial misconduct. FBI agents traced every PPP disbursement. IRS Criminal Investigation examined years of tax records. The Small Business Administration Office of Inspector General analyzed the applications. The Special Inspector General for Pandemic Recovery coordinated across agencies. When multiple federal agencies coordinate an investigation into your business empire, they find everything. They share information. They cross-reference documents. They identify patterns that no single agency would catch alone. Kethineni's seven companies became seven sources of evidence. His twelve applications became twelve threads for investigators to pull. His brothers became potential witnesses against him.
His brothers remain a mystery. The U.S. Attorney's Office didn't reveal wheather they were charged seperately. But the conspiracy charge captured the entire family scheme. Whether his brothers face there own prosecutions or were handled as cooperating witnesses, the family enterprise was destroyed.
Here's something practitioners understand that the public dosent. Kethineni pleaded guilty because fighting a multi-entity conspiracy case is nearly impossible. When prosecutors can show seven companies, twelve applications, and three family members all working together, the evidence is overwhelming. Every application corroborates every other application. Every family member implicates every other family member. The portfolio that made fraud seem easier is what made conviction unavoidable.
How Serial Applications Multiply Your Exposure
Maybe you think the Kethineni case is unusual. Seven companies. Three brothers. Most people don't have that kind of corporate structure.
Consider Lebnitz Tran.
Tran was a San Jose resident who submitted twenty-seven PPP loan applications. Twenty-seven. And seven EIDL applications. That's thirty-four seperate federal crimes in total.
Each application used false and fictitious information. Falsified employee information. Fictitious or grossely exaggerated payroll figures. Fake tax documents. Tran sought over $8 million in fraudulent loans. He actualy obtained aproximately $3.6 million. After fees and other deductions, he netted about $2 million.
Now think about the exposure. Tran was charged with six counts of wire fraud and three counts of bank fraud. Each wire fraud count carries up to 20 years. Each bank fraud count carries up to 30 years. The theoretical maximum? Over 200 years in federal prison.
Obviousely no one serves 200 years. But the volume of counts gives prosecutors enormous leverage. They can offer to drop some charges in exchange for a guilty plea. They can calculate sentencing enhancements based on the total loss across all applications. They can use the sheer number of fraudulent acts to argue for sentences at the high end of guidelines.
Every entity in your portfolio becomes a count in your indictment. One fraudulent application is bad. Ten fraudulent applications is catastrophic. Thirty-four fraudulent applications is a criminal career.
The serial applicant pattern is especialy dangerous in the Northern District. Prosecutors here are used to dealing with tech entrepreneurs who think at scale. They understand that the same mentality that makes someone submit one application might make them submit a dozen. And they charge acordingly.
The charging calculus for serial applicants is brutal. Each application is a seperate federal crime. Each false statement is a seperate act of fraud. Each wire transfer of funds is a seperate wire fraud count. When you submit 27 applications, prosecutors have 27 different bases for charges. Even if they only charge a fraction, the sheer volume creates insurmountable sentencing exposure. Tran's nine counts represent a fraction of the fraud he committed - and still carry potential sentences measured in decades.
What San Jose Sentences Actually Look Like
Let me show you whats actualy happening in the Northern District of California right now. Not guidelines. Not hypotheticals. Real sentences from real cases.
