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Ugandan man pleads guilty to $1.8 million #Covid-19 relief fraud in U.S

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Kanyike

Hassan Kanyike pleaded guilty to perpetrating a scheme to fraudulently obtain approximately $1.8 million (about 6.6 billion Ugandan shillings) in Covid-19 relief guaranteed by the Small Business Administration (SBA) through the Economic Injury Disaster Loan (EIDL) program and the Paycheck Protection Program (PPP).

According to court documents, Kanyike, 29, of Santa Clarita, admitted that he submitted six fraudulent PPP loan applications and two fraudulent EIDL applications. The applications sought funds to purportedly pay the salaries of employees whom he claimed worked for two of his businesses. Kanyike successfully obtained approximately $1 million through four PPP loans, and another $300,000 through two EIDL loans.

In support of the fraudulent PPP loan applications, Kanyike submitted fake federal tax filings and payroll reports. For example, in one loan application, Kanyike falsely claimed the business had 26 employees and an average monthly payroll of $168,000, and he submitted a fabricated IRS tax form claiming Falcon Motors had paid $2,022,300 in payroll in 2019. But Kanyike admitted during his plea that the company had substantially fewer employees and substantially lower payroll. Kanyike further admitted that he obtained additional Employer Identification Numbers from the IRS in April and May 2020, so that he could apply for multiple loans for the same used-car business. Kanyike then used a substantial portion of the PPP loan proceeds for his own personal benefit.

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Kanyike was arrested in December 2020 at Los Angeles International Airport just before he was about to board a flight to Dubai. At the time of his arrest, Kanyike had transferred approximately $762,000 to Uganda, his country of citizenship, from one of the business accounts that had received the loan proceeds, in violation of the terms of the PPP and EIDL program.

Kanyike pleaded guilty to one count of wire fraud before United States District Judge Virginia A. Phillips. He is scheduled to be sentenced on August 23 and faces a maximum penalty of 20 years in prison. As part of his guilty plea, Kanyike is required to pay approximately $1.3 million in restitution.

Homeland Security Investigations and Treasury Inspector General for Tax Administration investigated the case.

Assistant Chief William Johnston of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Richard E. Robinson of the U.S. Attorney’s Office for the Central District of California’s Major Fraud Section are prosecuting the case. The case was previously prosecuted by former Trial Attorney Benjamin Saltzman of the Fraud Section.

He is scheduled to be sentenced on Aug. 23, and faces a maximum penalty of 20 years in prison. As part of his guilty plea, Kanyike is required to pay approximately $1.3 million in restitution.



Source – Eagle Online

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