“Two men of Indian origin in the U.S. have pleaded guilty to their participation in a multi-million dollar fraud scheme by obtaining loans under an economic assistance plan following the COVID-19 pandemic in the country,” the justice department said.
The Department of Justice in a statement said Nishant Patel, 41, and Harjeet Singh, 49, both from Houston and three others engaged in fraudulently obtaining and laundering millions of dollars in forgivable Paycheck Protection Programme (PPP) loans that the Small Business Administration (SBA) guarantees under the CARES Act.
They admitted to submitting false and fraudulent PPP loan applications to SBA and certain SBA-approved PPP lenders.
All five defendants also assisted in laundering the fraudulently obtained PPP loan funds by supplying co-conspirators with blank, endorsed checks, which were made payable to people posing as employees of the companies that received the PPP loan, but who were in fact not employees.
These fake paychecks were then cashed at check-cashing stores that other members of the conspiracy controlled. As part of the scheme, Patel obtained a false and fraudulent PPP loan of about $474,993 and Singh obtained two false and fraudulent PPP loans for a total of $937,379, the statement said.
“The three others involved in the fraud obtained a total amount of more than $1.4 million,” it added. They are scheduled to be sentenced on January 4 next year and each face a total maximum penalty of five years in prison.
In addition to these five defendants, one other individual was convicted at trial for his involvement in the scheme, and 15 other individuals have pleaded guilty to their involvement in the loan fraud scheme.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 provided fast and direct economic assistance for American workers, families, small businesses, and industries affected by the COVID-19 pandemic.