COVID Frauds of the Week: Fraud on the PPP

This week’s COVID-19 frauds centered on (temporarily) successful attempts to receive Paycheck Protection Program (PPP) funds for nonexistent companies and fabricated or inflated employee headcounts.

First up is the owner of a wedding planning company that sought personal enrichment via more than $3 million in forgivable PPP loans for his 120 nonexistent employees. Fahad Shah, 44, of Murphy, Texas, was arrested and charged with wire fraud, money laundering, and making false statements to a bank. Shah received over $1.5 million in loan funds purportedly for his WBF Weddings by Farah Inc employees, which he instead used to purchase a Tesla, make personal investments, and to cover his home mortgage payments. (DOJ; USAO)

Austin resident Michael George McQuarn, 51, shared similar ambitions, using the $2 million he received to purchase a 26’ Pavati Wake Boat and a Rolls Royce. He secured the funds for two fake but fantastical-sounding companies, Vantastic Voyages, LLC and Happy Days Movers, LLC. He will likely regret his creativity, as the charges carry a penalty of up to 20 years for wire fraud and 5 years for making false statements to the SBA. (USAO)

Houston funeral director Jase DePaul Gautreaux aka Jase Dixon was arrested and charged with filing fraudulent loan applications, seeking more than $13 million in forgivable SBA loans. Dixon applied for loans on behalf of two companies, one of which is non-existent and one with which he had no affiliation. He received over $1.6 million in PPP funds through this scheme, payments which were to help pay his (now known to be) non-existent employees’ wages. (DOJ; USAO)

In what was likely an exciting event for fellow travelers, a married Ashburn, Virginia couple was arrested at John F. Kennedy International Airport, trying to flee the country after pocketing at least $30,000 in cash from PPP loan funds. They secured a total of $1,438,500 via submission of fraudulent Paycheck Protection Program (“PPP”) loan applications. Monica Magdalena Jaworska, 43, and her husband and co-defendant, Tarik Jaafar, 42, each face up to 20 years in prison for their alleged crimes. (USAO)

Meanwhile, several other defendants face charges for their equally egregious attempts to defraud the government, including:

• Ameet Goyal, M.D., of Rye, NY, received $630,000 in PPP loans. He was, however, ineligible to apply for relief due to his already pending criminal charges for healthcare fraud. Goyal’s new 6-count indictment carries terms anywhere from 5 to 30 years for each count. (USAO)
• Nadine Consuelo Jackson, 31, of Dayton, Ohio, faces up to 30 years in prison for bank fraud, and a maximum of 5 years for making a false statement within the jurisdiction of a federal agency. Jackson, claiming a roster of 73 employees, applied for two PPP loans totaling $2.5 million, of which $1.2 million has since been subsequently seized by the government. (USAO)
• Elijah Majak Buoi, 38, of Winchester, MA applied for over $13 million in PPP loans and received over $2 million in funds. Buoi applied on behalf of his company, Sosuda Tech LLC, and misrepresented the number of employees and his payroll expenses, supplying false documentation with the loan applications. The government has seized all but $20,000 of the cash. (DOJ; USAO)

The government’s vigilance in rooting out fraud has proven a successful line of attack in combating PPP-related schemes. Whistleblowers, however, will continue to play a vital role in the ongoing efforts to expose such frauds. If you have information about frauds related to COVID-19 or any other fraud on government programs, contact us.

Read More:

• What is COVID-19 Fraud?
• The Paycheck Protection Program is a Big Solution to a Big Problem, but it Needs Big Oversight
• Our Posts on Other COVID-19 Frauds
• Contact Us

Tagged in: Catch of the Week, COVID-19, FCA Federal, Financial and Investment Fraud, Financial Institution Fraud, Government Loan Programs, Importance of Whistleblowers, Legislation and Regulation News,