Sending lumens into an account in a Standalone Stellar node

Hi,

I setup a standalone stellar network by changing the NETWORK_PASSPHRASE as mentioned here.
I got the root account key in the logs after starting the network. Let call that root ROOT_ACCOUNT_KEY. I could also validate that it was the root account key by connecting to my standalone network and getting its balance which is 100000000000. I went ahead to generate a random seed and use it's address to send some XLM inside. The code below illustrates that

public static void main(String[] args) throws IOException {
    SetupStellarServer setupServer = new SetupStellarServer(ROOT_ACCOUNT_KEY);
    try {
     	     setupServer.createAccount(RANDOM_ADDRESS, "", String.valueOf(1));
	     setupServer.sendFunds(RANDOM_ADDRESS, String.valueOf(1000), "");
	     logger.info("Send....");
    }catch(ErrorResponse e) {
	     logger.error(e.getBody());
    }
}    

public SetupStellarServer(String seed){
	     Network network = new Network(PRIVATE_NETWORK_PASSPHRASE);
	     Network.use(network);
	     if(seed!=null){
     		keyPair = KeyPair.fromSecretSeed(seed);
	     }else{
		     keyPair=KeyPair.random();
	     }
     if(stellarServer == null)
             stellarServer = new Server(URL);
}

public AccountResponse createAccount(String destinationAccountId, String payload, String amount) throws IOException{
     KeyPair destination = KeyPair.fromAccountId(destinationAccountId);
     AccountResponse destinationAccount=null;
     Network network = new Network(PRIVATE_NETWORK_PASSPHRASE);
     Network.use(network);
     Operation operation=null;
     try{
	     destinationAccount=stellarServer.accounts().account(destination);
     }catch(ErrorResponse e){
	     if(e.getBody().toUpperCase().contains("NOT FOUND")){
		     logger.info("Account does not exist yet. We will now create it with 1 XLM:"+destinationAccountId);
	     }else{
		     throw e;
	     }
     }
     if(destinationAccount==null){
	     operation = new CreateAccountOperation.Builder(KeyPair.fromAccountId(destinationAccountId), amount).setSourceAccount(keyPair).build();
	     logger.info("Account creator is:"+keyPair.getAccountId());
	     AccountResponse sourceAccount= stellarServer.accounts().account(keyPair);
	     Transaction transaction = new Transaction.Builder(sourceAccount)
				.addOperation(operation)
		        .addMemo(Memo.text(payload))
		        .build();
	     transaction.sign(keyPair);
	     stellarServer.submitTransaction(transaction);
     }
     return  destinationAccount;
}


public  SubmitTransactionResponse sendFunds( String destinationAccountId, String amount, String payload) throws IOException{
     KeyPair destination = KeyPair.fromAccountId(destinationAccountId);
     Network network = new Network(PRIVATE_NETWORK_PASSPHRASE);
     Network.use(network);
     Asset asset= new AssetTypeNative();
     stellarServer.accounts().account(destination);
     Operation operation=new PaymentOperation.Builder(destination, asset, amount).build();
     AccountResponse sourceAccount= stellarServer.accounts().account(keyPair);
     Transaction transaction = new Transaction.Builder(sourceAccount)
			.addOperation(operation)
	        .addMemo(Memo.text(payload))
	        .build();
     transaction.sign(keyPair);
     return  stellarServer.submitTransaction(transaction);
}

I'm using the java SDK for stellar. This code works well on the testnet but when I run it on the standalone network, I keep getting

{
    "type": "https://stellar.org/horizon-errors/not_found",
    "title": "Resource Missing",
    "status": 404,
    "detail": "The resource at the url requested was not found.  This is usually occurs for one of two reasons:  The url requested is not valid, or no data in our database could be found with the parameters provided."
}

I understand the exception might be because the account does not existing but AFAIK, to create an account on the stellar network, you need to do a transfer towards the account's address. This is what I doing in the createAccount method. Also the URL exists and is reachable. I could validate that by getting the balance of the root account key programmatically.

I have been working on this for the pass 3 days. I'm frustrated. I believe that I'm missing something.

Any clue will be welcoming.
Thanks.