CONTACT: Barbara Burns
TELEPHONE: (716) 843-5817
FAX No .: (716) 551-3051
BUFFALO, NY – A man from Buffalo, New York was charged in an unsealed criminal complaint today for alleged participation in a fraud program against multiple financial institutions by filing bank loan applications seeking fraudulent Paycheck Protection Program (PPP) loans Guaranteed by Small Business Administration (SBA) under the Coronavirus Aid, Relief and Economic Security (CARES) Act.
Deputy Assistant Attorney General Nicholas L. McQuaid of the Department of Justice’s Criminal Division, US Attorney James P. Kennedy Jr. for the West District of New York, Special Representative Patricia Tarasca of the Federal Deposit Insurance Corporation – Inspector General’s Office (FDIC-OIG), Special Agent in charge William Kalb of the US Treasury Inspector for the North East Field Office of the Inspector General (TIGTA-OIG) of the Tax Administration, Special Agent in charge Stephen Belongia of the FBI’s Buffalo Field Office and Special Agent Amaleka McCall-Brathwaite of the Inspectorate General of the Small Business Administration (SBA-OIG ), Region East, announced this.
Christian Johnson, 23, of Buffalo, has been charged with criminal charges of wire fraud, bank fraud and misrepresentation against a financial institution.
The complaint alleges that Johnson filed several fraudulent PPP loan applications with at least three financial institutions on behalf of a company called Million Man LLC (Million Man). The complaint alleges that these filings contained numerous false and misleading statements about the business and operations of Million Man, including the number of employees and average monthly payroll. The complaint also alleges that Johnson submitted falsified federal tax records in support of the fraudulent loan applications.
The CARES Act is a federal law passed March 29, 2020 designed to provide emergency financial aid to millions of Americans suffering from the economic effects of the COVID-19 pandemic. One source of relief from the CARES Act was the PPP’s approval of up to $ 349 billion in unsuccessful small business loans to help keep jobs and certain other expenses. In April 2020, Congress approved over $ 300 billion in additional PPP funding, and in December 2020, Congress approved an additional $ 284 billion in additional funding.
The PPP enables qualified small businesses and other organizations to obtain loans with a term of two years and an interest rate of 1%. PPP loan proceeds must be used by businesses for labor costs, mortgage interest, rents and utilities. The PPP enables the forgiveness of interest and principal when companies spend the proceeds on these expenses within a specified period of time and use at least a certain percentage of the loan on wages and salaries.
A federal criminal complaint is just an accusation. A defendant is presumed innocent until proven guilty.
This case has been investigated by FDIC-OIG, TIGTA-OIG, FBI and SBA-OIG. Trial attorneys Joshua N. DeBold and Matthew Reilly of the Criminal Division’s Fraud Department and U.S. Assistant Attorney David J. Rudroff of the New York City Western District Attorney are pursuing the case.
The Fraud Department oversees the prosecution of fraud programs that exploit the PPP. In the nine months since the PPP began, lawyers for the fraud division have prosecuted more than 100 defendants in more than 70 criminal cases. The fraud department also seized more than $ 60 million in cash receipts from fraudulently obtained PPP funds, as well as numerous real estate and luxury goods purchased with such proceeds. Further information can be found at: https://www.justice.gov/criminal-fraud/ppp-fraud.
Anyone with information on suspected COVID-19 fraud can report this by calling the National Justice Department’s Disaster Fraud hotline at 866-720-5721 or using the NCDF web complaint form at https: //www.justice. gov / disaster fraud / ncdf disaster complaint form.
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