REPORT: Feds arrest Chinese national who applied for MILLIONS in coronavirus-relief loans

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BY TEAM DML / MAY 21, 2020 /

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A Chinese national living in New York tried to bilk the federal government and banks out of tens of millions of dollars in coronavirus relief loans by requesting the money for “small businesses” that only employed him, federal prosecutors said Thursday.

Muge Ma, 36, who goes by the name Hummer Mars, was arrested Thursday and hit with one count of bank fraud, one count of wire fraud, and one count of making false statements to a bank for the scheme, Geoffrey Berman, the US Attorney for the Southern District of New York, said.

The article goes on to state the following:

Ma allegedly applied for $20 million in government-backed loans from the Small Business Association and five banks, claiming his two companies employed hundreds of people and paid them millions of dollars each month.

The Justice Department reported the following details in a press release on Thursday:

From at least in or about March 2020 through at least on or about May 15, 2020, MA applied to the SBA and at least five banks for a total of over $20 million in Government-guaranteed loans for the his companies NYIC and Hurley (together, the “Ma Companies”) through the SBA’s PPP and EIDL Program.  In connection with these loan applications, MA represented, among other things, that he was the sole owner and executive director of the Ma Companies, that the Ma Companies were located on the sixth floor of his luxury condominium building in New York, New York, and that NYIC and Hurley together had hundreds of employees and paid millions of dollars in wages to those employees on a monthly basis.  In fact, however, MA appears to have been the only employee of NYIC since at least in or about 2019, and Hurley does not appear to have any employees.  In order to support the false representations made by MA in the loan applications about the number of employees at, and the wages paid by, the Ma Companies, MA submitted fraudulent and doctored bank records, tax records, insurance records, payroll records, and/or audited financial statements to five different banks, and also provided links to the Ma Companies’ websites, which describe them as purportedly “global” companies.  In the course of these loan applications, MA also misrepresented that he was a United States citizen, when, in fact, he is a Chinese national with lawful permanent resident status in the United States.

Before the discovery of the fraudulent conduct by MA, the SBA approved a $500,000 EIDL Program loan for NYIC and a $150,000 EIDL Program loan for Hurley, and at least a $10,000 loan advance was provided to NYIC.  In addition, a bank approved and disbursed over approximately $800,000 in PPP loan funds for Hurley, which were frozen in connection with this investigation.  As a result, MA sought to withdraw his loan applications from the banks and return the funds.

MA and individuals purporting to work for NYIC have also fraudulently represented to a COVID-19 test kit manufacturer and a medical equipment supplier that NYIC is representing the New York State Government and the Governor of New York in procuring COVID-19 test kits and personal protective equipment (“PPE”) to respond to the COVID-19 pandemic.  Among other incidents, in a recorded call that took place on or about May 18, 2020, MA represented, in substance and in part, that his company NYIC was a registered vendor for New York State, among other state governments, and that NYIC had a big team working on a deal for the State.  NYIC is not, however, an authorized vendor of New York State, nor has NYIC been authorized to represent New York State in connection with the procurement of COVID-19 supplies.

MA, 36 of New York, New York, is charged with one count of bank fraud, one count of wire fraud, and one count of making false statements to a bank, each of which carries a maximum sentence of 30 years in prison, one count of major fraud against the United States, which carries a maximum sentence of 10 years in prison, one count of making false statements, which carries a maximum sentence of five years in prison, and one count of making false statements to the SBA, which carries a maximum sentence of two years in prison.  The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

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