Chinese State Pled Guilty to $ 20 Million COVID-19 Pandemic Loan Fraud Scheme | USAO-SDNY



Audrey Strauss, US Attorney for the Southern District of New York, announced that MUGE MA, a / k / a “Hummer Mars”, a Chinese citizen residing in New York, NY, has today pleaded guilty to fraud … A scheme to receive more than $ 20 million in government-guaranteed loans to help small businesses during the novel coronavirus / COVID-19 pandemic. In connection with applications for a loan for assistance available under the Payroll Protection Program (“PPP”) and the Economic Disaster Loan Program (“EIDL”), MA was falsely submitted to the US Small Business Administration (“SBA “) And at least five financial institutions in which his companies, New York International Capital LLC (” NYIC “) and Hurley Human Resources LLC (” Hurley “), had hundreds of employees and paid these employees millions of dollars in wages, while in fact, MA seems to have been the only employee of his company. M.A. was previously arrested on May 21, 2020 and has been in custody since his arrest. He pleaded guilty today before US District Judge Richard M. Berman, and his sentence is due on September 22, 2021 at 11:00.

Manhattan Attorney Audrey Strauss said: “As he admitted in court today, Muge Ma tried to obtain more than $ 20 million in government-guaranteed loans for businesses affected by the coronavirus / COVID-19 pandemic. Continuing this scheme, Ma falsely told banks and the SBA that he owned two companies with hundreds of employees, to whom he paid millions in salaries. In truth, Ma appears to be the only employee in any of the companies, and he had no legitimate claims to the funds for which he applied. Small businesses face uncertainty and unprecedented challenges, the least of which must be opportunists trying to plunder federal aid funds. Now Muge Ma is awaiting sentencing for admitted criminal fraud. “

According to allegations in public records in federal court in Manhattan:

The Coronavirus Relief, Relief and Economic Security Act (“CARES”) is a federal law passed on March 29, 2020, designed to provide emergency financial assistance to millions of Americans suffering from the economic fallout caused by the COVID-19 pandemic. … One source of relief provided by CARES was the authorization of hundreds of billions of dollars in non-repayable loans to small businesses to save jobs and certain other expenses through SBA PPPs. Under the CARES law, the amount of PPP funds that a business can receive is determined by the number of employees hired by the business and their average salary costs. Companies applying for a PPP loan must provide documentation to prove that they previously paid employees the compensation specified in the loan application. The CARES Act also expanded a separate EIDL program, which has provided small businesses with low-interest loans of up to $ 2 million that can provide vital economic support to help overcome the temporary loss of income they are experiencing due to COVID-19.

Between about March 2020 or about May 15, 2020, MA applied to the SBA and at least five banks for a total of more than $ 20 million in government-guaranteed loans for its NYIC and Hurley companies (together, “ Companies Ma ”) through the SBA PPP and EIDL programs. In connection with these loan applications, M.A. presented, among other things, that he was the sole owner and CEO of Ma’s companies, that Ma’s companies were located on the sixth floor of his luxury condominium in New York, NY, and that NYIC and Hurley together have hundreds of employees and pay them millions every month dollars wages. In fact, however, MA appears to have been the only NYIC employee since at least 2019 or so, and Hurley doesn’t seem to have any employees. In order to corroborate the false representations made by MA in loan applications about the number of employees and the wages paid by Ma companies, MA submitted fake and fake bank records, tax reports, insurance reports, payrolls and / or checked the financial statements of five different banks, and provided links to websites of Ma companies that describe them as supposedly “global” companies. During the filing of these loan applications, M.A. also falsely stated that he is a US citizen, when in fact he is a Chinese citizen with the legal status of a permanent resident of the United States. MA also used the name and identity of another person in connection with filing a fraudulent loan application and supporting documentation with at least one financial institution.

Prior to the discovery of MA fraud, the SBA approved a $ 500,000 EIDL loan to NYIC and an EIDL loan of $ 150,000 to Hurley, and NYIC received a loan advance of at least $ 10,000. In addition, the bank approved and disbursed more than $ 800,000 in PPP loans to Hurley, which were frozen in connection with this investigation. As a result, M.A. tried to withdraw his loan applications from banks and return the funds.

* * *

M.A., 37 from New York, NY, found guilty on one count of bank fraud, which carries a maximum sentence of 30 years in prison, and one count of aggravated identity theft. which carries a mandatory minimum sentence of two years in prison. consistently with any other conviction. The maximum number of possible sentences is set by Congress and is listed here for informational purposes only, as any sentence to a defendant will be determined by a judge.

Ms Strauss praised the investigative work of the FBI Financial Cybercrime Task Force, SBA-OIG and IRS-CI. Ms. Strauss also thanked the NYPD, NYS Comptroller and NYS Department of Labor for their assistance in the investigation.

This case is being prosecuted by the Office’s Fraud and Cybercrime Division. Assistant US Attorney Sagar K. Ravi answers the charge.


Source link