Dept. of Justice charge Texas man in $24 million COVID-19 relief fraud
The United State Department of Justice released a statement saying a Dallas-area man was charged in an indictment filed Thursday, October 8, 2020, for his alleged participation in a scheme to file fraudulent loan applications seeking approximately $24.8 million in forgivable Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, U.S. Attorney Erin Nealy Cox of the U.S. Attorney’s Office for the Northern District of Texas, Inspector General Jay N. Lerner of the Federal Deposit Insurance Corporation (FDIC), Special Agent in Charge Tamera Cantu of the IRS Criminal Investigation (IRS-CI) Dallas Field Office, and Inspector General J. Russell George of the Treasury Inspector General for Tax Administration (TIGTA) made the announcement.
Dinesh Sah, 55, of Coppell, Texas, was charged in an indictment filed in the Northern District of Texas with three counts of wire fraud, three counts of bank fraud, and one count of money laundering, according to a statement from the DOJ.
The indictment alleges that Sah submitted 15 fraudulent applications, filed under the names of various purported businesses that he owned or controlled, to eight different SBA-approved lenders seeking approximately $24.8 million in PPP loans. In his applications, Sah claimed that these businesses had numerous employees and hundreds of thousands of dollars in payroll expenses when, in fact, no business had employees or paid wages consistent with the amounts claimed in the PPP applications, according to the statement from the DOJ.
The Dept. of Justice said that the indictment further alleges that Sah submitted fraudulent documentation in support of his applications, including falsified federal tax filings and forged bank statements for the purported businesses. Sah ultimately received approximately $17.3 million in PPP loan funds and used the proceeds primarily for personal expenses, spending them on multiple homes and luxury cars, including a 2020 Bentley convertible, and sending millions of dollars in international transfers, the indictment alleges. To date, the government has seized more than $6.5 million in fraudulent proceeds that Sah obtained during the scheme.
The CARES Act, as explained by the DOJ, is a federal law enacted on March 29, 2020. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the funds towards payroll expenses.
The DOJ defines an indictment as an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the Dallas Field Offices of FDIC-OIG, IRS-CI, and TIGTA. Assistant Deputy Chief Anna G. Kaminska of the Criminal Division’s Fraud Section, and Economic Crimes and Public Corruption Section Chief Katherine Miller of the U.S. Attorney’s Office for the Northern District of Texas, are prosecuting the case according to the Department of Justice.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.