Texas Max Charged in Multi-Million Dollar COVID-19 Relief Fraud

United States Attorney for the Northern District of Texas, Erin Nealy Cox, along with Acting Assistant Attorney General Brian C. Rabbitt of the Criminal Division of the Department of Justice has announced the charges made against a Texas man on October 9, 2020, for engaging in a fraudulent scheme that was designed to swindle the United States government’s Paycheck Protection Program (PPP) out of $17 million in bank loans.

Dinesh Sah, 55, has been charged with three counts of bank fraud, one count of money laundering, and three counts of wire fraud for allegedly submitting multiple fraudulent applications for the bank loans through the Paycheck Protection Program of the United States, filing the applications under different companies.

The lawsuit alleges that the defendant has submitted 15 applications, in total, to eight different lenders that have been approved by the United States Small Business Administration. In these applications, it was noted that the defendant had filed the documents under several claimed businesses that he owned or controlled, seeking approximately $25 million of proceeds from the PPP. The lawsuit further alleges that the defendant wrongfully claimed that the companies declared in the application files had numerous employees and hundreds of thousands of dollars in payroll expenses; however, investigations revealed that a number of the business declared by the defendant in his applications were made only after the Coronavirus Aid Relief and Economic Security (CARES) Act has been enacted. Besides, it was shown that all the loan applications to different banks submitted by the defendant through the U.S. government’s PPP were fraudulent, and contained false information, glaring omissions, and misleading statements regarding the companies’ respective business operations. It also was reported that the defendant submitted altered documents particularly, forged federal tax filings and falsified bank statements of the reported companies.

With the fraudulent scheme that the defendant has methodically devised, he was able to receive approximately $17.7 million of bank loans through the PPP. Moreover, the defendant was able to afford a 2020 Bentley convertible, among other personal expenses, several homes, multiple luxury cars, and luxury items through his new, illegally obtained wealth. As of October 9, 2020, the government has seized more than $6.5 million, which is only about 37% of the total proceeds that the defendant received through his fraudulent scheme involving the Paycheck Protection Program.

United States Attorney Erin Nealy Cox asserted that the States Attorney’s Office would continue prosecuting criminals, particularly those that are taking advantage of the system even in these especially challenging times. She also noted how the defendant had exploited the current situation of the nation, where the terrible pandemic has been used for personal gain, and thus declared that he be held accountable to the American people for his actions. “COVID-19 has devastated the finances of hardworking business owners across the nation. PPP funds should be reserved for those who really need them to keep their companies afloat. We are committed to ensuring that anyone that take advantage of the system will be brought to justice,” said State’s Attorney Cox.

Internal Revenue Service – Criminal Investigation of the Dallas Office’s Special Agent in Charge Tamera Cantu, said in a statement declaring that the indictment of the defendant demonstrates how several criminals and greedy individuals are abusing the government’s Paycheck Protection Program, and are depriving numerous legitimate small business owners in the United States a large amount of funds to ensure that their companies stay afloat during this pandemic, while also properly paying their employees. Furthermore, Special Agent Cantu asserts that the IRS – Criminal Investigations will work in collaboration with the United States Attorney’s Office for the Northern District of Texas, along with other federal law enforcement agencies to protect innocent Americans from fraudulent schemes, and ultimately, to bring justice to the nation.

The Payroll Protection Program is being administered by the United States Small Business Administration as a part of the $2.2 trillion Coronavirus Aid Relief and Economic Security (CARES) Act – a federal law that was enacted in March of 2020 as a response to the COVID-19 pandemic, in order to provide emergency financial assistance to American citizens who are suffering from the economic distress that the pandemic has brought to the nation. The program offers loans to businesses, in which it is specified that proceeds from the PPP shall be used only on certain permissible expenses, including interests on mortgages, payroll costs, rent, and utilities. Additionally, the Payroll Protection Program has declared the authorization of up to $349 billion in forgivable loans, where interests and principal on the PPP loan shall be entirely forgiven, if and only if, the business is able to utilize 60% of the loan proceeds on payroll expenses and spend the loan on the aforementioned permissible expenses within a designated period of time. All loans made through the Paycheck Protection Program are fully guaranteed by the U.S. Small Business Administration.

In April of 2020, the Congress has authorized additional PPP funding amounting to over $300 billion. The Paycheck Protection Program currently allows qualifying small business and other eligible organizations to receive loans with a maturity of two years, and an interest rate of only one percent.

Investigations on the case were made by the Dallas Field Offices of the Federal Deposit Insurance Corporation – Office of Inspector General, the Internal Revenue Service – Criminal Investigations Division, and the United States Treasury Inspector General for Tax Administration. Prosecution of the case is handled by the Assistant Deputy Chief Anna G. Kaminska of the Criminal Division’s Fraud Section Economic Crimes, and the United States Attorney’s Office for the Northern District of Texas – Public Corruption Section Chief Katherine Miller, and the Assistant United States Attorney Erica Hilliard of the United States Attorney’s Office for the Northern District of Texas.

With the provided criminal documents containing allegations that are not evidence of guilt, the public is reminded that the defendant shall be presumed innocent and is entitled to a fair trial at which the state has the burden of proving guilt beyond a reasonable doubt.Further information regarding any possible allegations of attempted fraud involving the Paycheck Protection Program, the Coronavirus Aid Relief and Economic Security (CARES) Act, and other COVID-19 related schemes shall be reported to the National Center for Disaster Fraud of the Department of Justice by contacting them through their Hotline at (866)-720-5721, or through their NCDF Web Complaint Form at  https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form. Assistant United States Attorney Fabio Leonardi – COVID 19 Fraud Coordinator for the Northern District of Texas may also be reached through Telephone at (214)-659-8600.

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