NYC Man Accused of Trying to Obtain $20 Million in Coronavirus Small Business Loans, Despite Having No Employees

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NYC Man Accused of Trying to Obtain $20 Million in Coronavirus Small Business Loans, Despite Having No Employees
A screenshot of the web site for New York International Capital, which prosecutors say belongs to Muge Ma, is proven. Ma is accused of a scheme to defraud the U.S. authorities of over $20 million in coronavirus financial reduction. Screenshot

A Chinese nationwide dwelling in New York City was arrested on Thursday for what prosecutors describe as a forlorn scheme to defraud the Small Business Administration (SBA) out of over $20 million in funds meant to guard flagging companies throughout the present recession.

Muge Ma, who typically goes by the identify Hummer Mars, is accused of doctoring tax types that have been then submitted to a number of personal banks in assist of mortgage functions underneath the Paycheck Protection Program—created by Congress throughout the pandemic to maintain firm payrolls and keep away from layoffs.

Despite claiming his two corporations employed lots of of individuals and had hundreds of thousands of {dollars} in month-to-month payroll obligations, Ma was apparently the one worker, in accordance with an affidavit submitted in his legal case by FBI Special Agent William McKeen.

A legal criticism accredited by federal prosecutors outlines six costs in opposition to Ma, together with wire fraud, financial institution fraud and making false statements to a financial institution. If the case goes to trial, a conviction on any of these three costs may lead to a most sentence of 30 years’ imprisonment.

Ma, 36, appeared by way of teleconference for an preliminary listening to on Thursday. A lawyer assigned to him didn’t return a request for remark. A subsequent listening to within the case is about for June. He is presently being held with out bail—the federal government believes he’s a flight danger—on the infamous Metropolitan Correctional Center in Lower Manhattan.

One of the businesses attributed to Ma, New York International Capital (NYIC), utilized to the SBA and was accredited for $500,000 underneath the Economic Injury Disaster Loan program. Another firm registered with Ma as its sole member, Hurley, was accredited for $150,000 underneath this system, through which the SBA offers low-interest loans to small companies affected by coronavirus-related financial hurt.

NYIC is described on its web site as “a patriotic American Management Consulting firm headquartered in Manhattan.” A $10,000 mortgage advance given to NYIC was later spent at a shopper electronics retailer and a division retailer, in accordance with McKeen.

Ma submitted functions to a number of banks to garner further funds for NYIC. Prosecutors imagine these and different paperwork have been fraudulent. In an utility to an unnamed financial institution, headquartered in Manhattan, Ma is alleged to have requested over $6 million underneath the Paycheck Protection Program, a forgivable mortgage approved by the SBA which was designed to assist struggling corporations make payroll.

Ma allegedly mentioned on his utility that he’s a U.S. citizen and that NYIC had 483 workers it needed to compensate. On the opposite, Ma is a everlasting resident and NYIC “did not pay any wages to any employees in 2019,” in accordance with tax information reviewed by McKeen.

Ma additionally submitted a monetary audit reporting over $40 million in income for NYIC in 2019. McKeen says this doc was fabricated, along with a bunch of different payroll and monetary statements purporting to characterize the corporate’s situation.

That mortgage was denied for potential fraud, and several other different comparable functions for PPP loans have been denied afterward. In one case, a denial prompted Ma to tell the financial institution that he needed to withdraw the applying “because our company does not want the PPP.”

Notwithstanding these setbacks, one financial institution seems to have truly delivered $800,000 in PPP funds to Ma’s different firm, Hurley. However, that deposit was later frozen in reference to the FBI’s investigation.

Ma additionally allegedly corresponded with suppliers of non-public protecting tools, falsely representing himself as a consultant of New York Governor Andrew Cuomo.

“There are many people in desperate need of federal money right now to get them through an unbelievably difficult time,” FBI Assistant Director William F. Sweeney Jr. mentioned in a press release. “The last thing they need to hear is that a fraudster allegedly tried to steal millions of dollars for his own selfish use.”