SEC Charges North Carolina Man and Entities He Controlled with Fraud

The Securities and Exchange Commission (SEC) has taken legal action against Dharma Teja Nukarapu, a resident of Apex, North Carolina, and India, along with the healthcare software development firm he controlled, SharkDreams, Inc. Additionally, D Dollar Inc. is implicated for its role in soliciting investor funds that were later misappropriated by Nukarapu.

As per the SEC’s complaint, SharkDreams and Nukarapu engaged in fraudulent activities, raising approximately $2.7 million from over 20 investors through securities offerings from January 2018 to November 2019. They made several false and misleading statements to both existing and potential investors. These misleading claims included assertions that prior investors had doubled their investments within a year, SharkDreams was valued at $7 million to $30 million, the company had customer orders for its LIVIT products, and a large investor would buy all remaining SharkDreams shares to inject capital. However, these claims were allegedly untrue. The complaint further alleges that SharkDreams never generated revenue from LIVIT product sales, there was no factual basis for the claimed valuation, and no genuine offer was made to purchase SharkDreams shares.

Furthermore, in 2019 and 2020, D Dollar raised at least $650,000 from investors, purportedly for a subsidiary. However, Nukarapu misappropriated approximately $595,000 of investor funds to support SharkDreams’ operations and for personal use.

The SEC’s complaint, filed in the U.S. District Court for the Eastern District of North Carolina, charges Nukarapu and SharkDreams with multiple violations, including Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5. Nukarapu is also charged as a control person for violations of Section 10(b) of the Exchange Act and Rule 10b-5 by SharkDreams and D Dollar under Section 20(a) of the Exchange Act. D Dollar is charged with various violations, including Sections 17(a)(1) and (3) of the Securities Act, Section 10(b) of the Exchange Act, and Rules 10b-5(a) and (c). The SEC’s complaint seeks permanent injunctive relief, conduct-based injunctions, disgorgement with prejudgment interest, civil penalties, and an officer and director bar for Nukarapu.