Man Sentenced for Covid-19 Relief Fraud Program | Takeover bid
A Washington state man was sentenced today to two years in prison for carrying out a scheme to fraudulently obtain COVID-19 disaster relief loans guaranteed by the Small Business Administration (SBA) through the Economic Disaster Loan (EIDL) and Paycheck Protection Program (PPP)) under the Aid, Relief and Economic Security Act (CARES) against the coronavirus.
Austin Hsu, 46, of Issaquah, pleaded guilty on January 21. According to court documents, Hsu submitted nine fraudulent disaster loan applications for more than $ 1.1 million. Hsu, owner and CEO of a company named Blackrock Services PS dba Back 2 Health Bellevue (Back 2 Health), received EIDL and PPP funds for Back 2 Health and then used the names of current and former Back 2 Health employees. to apply for additional PPP loans on behalf of four other companies he owned and controlled. In support of the fraudulent PPP loan applications, Hsu submitted false federal income tax returns.
Hsu also incorporated a company named Blueline Capital LLC (Blueline) in June 2020 with the aim of applying for an EIDL loan in July 2020 and then falsely stated to the SBA that Blueline had been in business since 2017 and that as of January 31. , 2020, Blueline had nine employees and gross revenues of over $ 1.5 million. In truth, Blueline had no activity or activity.
Six of Hsu’s nine fraudulent loan applications were approved, and he fraudulently obtained more than $ 700,000 in COVID-19 relief funds.
In addition to the prison term, Hsu was ordered to pay a fine of $ 25,000 and $ 709,104.97 in restitution.
Deputy Attorney General Kenneth A. Polite Jr. of the Criminal Division of the Department of Justice; Acting US attorney Tessa M. Gorman for the Western District of Washington; Inspector General J. Russell George of the United States Inspector General of the Treasury for Tax Administration (TIGTA); Inspector General Gail S. Ennis of Social Security Administration (SSA); Inspector General Hannibal “Mike” Ware of the SBA; and US Customs and Immigration Homeland Security Investigation (HSI) Special Agent Cardell Morant made the announcement.
This matter was investigated by TIGTA, SSA – Office of Inspector General (OIG), SBA – OIG and HSI.
Trial attorney Christopher Fenton of the Fraud Section of the Criminal Division and Deputy U.S. Attorney Steven Masada of the Western District of Washington are continuing the case.
The Fraud Section leads the ministry’s prosecution of fraud schemes that exploit the PPP. In the months following the start of the PPP, Fraud Section lawyers prosecuted more than 100 defendants in more than 70 criminal cases. The Fraud Section also seized over $ 65 million in cash proceeds from fraudulently obtained PPP funds, as well as numerous real estate and luxury items purchased with these products. For more information, visit: https://www.justice.gov/criminal-fraud/ppp-fraud.
In May, the Attorney General established the COVID-19 Enforcement Task Force to mobilize resources from the Department of Justice in partnership with government agencies to strengthen efforts to combat and prevent fraud related to the pandemic. The Working Group strengthens efforts to investigate and prosecute the most culpable national and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud, among other methods, by scaling up and integrating mechanisms coordination, identifying resources and techniques for uncovering fraudulent actors and their programs, and sharing and leveraging information and knowledge gained from previous enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https: //www.justice. gov / disaster-fraud / ncdf-disaster-complaint-form.