A Texas man was sentenced today to more than 11 years in prison for fraud and money laundering related to his fraudulent scheme to obtain approximately $ 24.8 million in forgivable loans from the Paycheck Protection Program (PPP).
Dinesh Sah, 55, of Coppell, pleaded guilty on March 24, 2021. According to court documents, Sah filed 15 fraudulent claims filed with eight different lenders under the names of various alleged companies he owned or controlled for around $ 24.8 million in PPP loans. Sah claimed that these companies had numerous employees and hundreds of thousands of dollars in payroll, when in reality no company had employees or paid wages equal to the amounts requested in the PPP applications. Sah also submitted fraudulent documents in support of his claims, including falsified tax returns and bank statements for the alleged companies, and incorrectly cited others as the authorized agents of certain of these companies without the authority to use their identifying information in the claims.
“Today’s ruling serves as a clear reminder that those who use COVID relief programs to enrich themselves will be held accountable under the law,” said Assistant Attorney General Kenneth A. Polite Jr. of the Department of Justice’s Criminal Police Department. “The Justice Department and its law enforcement partners remain determined to aggressively prosecute and bring to justice those who steal federal funds to help legitimate small businesses.”
“Congress passed the paycheck protection program to help companies in trouble stay afloat, not to fund the luxury lifestyles of fake entrepreneurs,” said acting US Attorney Prerak Shah for the Northern District of Texas. “Even as COVID-19 ravaged businesses across the country, Mr. Sah saved millions of dollars from the relief fund that could have helped them. He took advantage of the pandemic for his personal gain and we are proud to hold him accountable. “
“This conviction serves as a deterrent to anyone who would attempt to commit fraud against any of the COVID-19 relief programs,” said special agent Christopher J. Altemus Jr. of the IRS Criminal Investigation Dallas Field Office. “These programs are here to help during a pandemic, not to take advantage of fraudsters like Sah.”
“The Treasury Inspector General for Tax Administration aggressively persecutes those who attempt to defraud programs offered to the American people under the CARES Act,” said J. Russell George, inspector general for the Treasury Tax Administration (TIGTA). “We appreciate the efforts of the Department of Justice and our law enforcement partners in these efforts.”
Based on his false statements and forged documents, Sah received over $ 17 million in PPP loan funds and diverted the proceeds to his personal gain to buy multiple Texas homes, pay off mortgages on other California homes, and one Fleet of luxury cars including a Bentley convertible, Corvette Stingray and a Porsche Macan. Sah has also deposited millions of dollars in PPP proceeds on international money transfers. As part of his guilty guilty plea, Sah agreed to forfeit eight homes, six luxury vehicles and more than $ 9 million in fraudulent receipts that the government has so far confiscated, among other things.
In addition to the prison term, Sah was sentenced to pay $ 17,284,649.79.
The Dallas Field Offices of the FDIC-OIG, IRS-Criminal Investigation and US Treasury General Inspector General for Tax Administration investigated the case.
The case was being prosecuted by deputy deputy chief Anna G. Kaminska of the criminal fraud division and division chief Katherine Miller of the U.S. Attorney’s Office for the Northern Texas area. Assistant US attorneys Erica Hilliard and Dimitri Rocha handled the asset recovery component of the case.
The Coronavirus Aid, Relief and Economic Security (CARES) Act is federal law passed March 29, 2020 and aims to provide emergency financial aid to millions of Americans suffering from the economic impact of the COVID-19 pandemic. One source of relief from the CARES bill was its approval of up to $ 349 billion. In April 2020, Congress approved over $ 300 billion in additional PPP 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, rent and utilities. The PPP allows interest waiver and amortization of the PPP loan if the company spends the loan proceeds on these expense items within a specified period of time after receipt of the proceeds and uses at least a certain percentage of the PPP loan proceeds on labor costs.
The Fraud Department directs the Justice Department’s prosecution of attempted fraud that exploits the CARES Act. In the months since the CARES law was passed, lawyers for the fraud division have prosecuted more than 100 defendants in more than 70 criminal cases. The fraud department has also confiscated more than $ 65 million in cash proceeds from fraudulently obtained PPP funds, as well as numerous real estate and luxury goods acquired with those proceeds. Further information can be found at: https://www.justice.gov/criminal-fraud/cares-act-fraud.
Anyone with general information on suspected COVID-19 fraud can report this by calling the Department of Justice’s National Center for Disaster Fraud hotline at 866-720-5721 or using the NCDF web complaint form at: https: //www.justice .gov / desaster-fraud / ncdf-disaster-complaint-form.