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Texas Man Charged in $24 Million COVID-19 Relief Fraud

carlos-alfonso-HCcmfL-l08I-unsplash-300x188The U.S. Department of Justice filed an indictment Thursday charging a Dallas-area man for his alleged participation in a scheme to file fraudulent loan applications seeking approximately $24.8 million from a federal COVID-19 relief program.

Dinesh Sah, 55, of Coppell, TX, was charged with three counts of wire fraud, three counts of bank fraud, and one count of money laundering. He was arrested on September 16 and remains in custody. The press did not name an attorney for him.

The indictment claims that the 55-year old from Texas submitted 15 fraudulent applications under the names of various businesses he owned or controlled to eight different financial institutions seeking $24.8 million in loans from the Paycheck Protection Program (PPP). The accused purportedly inflated the number of employees and payroll expenses the businesses had. In reality, none of them had employees or paid salaries equal to the amounts he claimed in his loan applications. To support his applications, the arrested man submitted doctored documents, including forged bank statements for the alleged businesses and falsified tax filings, the indictment claims.

The Paycheck Protection Program is part of a $3 trillion coronavirus stimulus bill that was passed by Congress on March 29, 2020. The forgivable loans, which are backed by the Small Business Administration (SBA), are meant to provide emergency financial assistance to qualifying businesses that are suffering from the economic effects of the coronavirus pandemic. Businesses must use the proceeds for business-related expenses, such as paying rent and utilities, maintaining payroll, and paying interest on mortgages.

Not all of his applications were approved, but he ultimately received $17.3 million in PPP funding, which he allegedly used to buy a luxury vehicle, pay off his home mortgage, buy another house in Coppell, and pay off two houses in his wife’s name in California. He also wire transferred $50,000 to India, the indictment alleges. The government has so far seized more than $6.5 million of the funds the accused purportedly received, six residences in Coppell, and multiple properties in California, sources indicate.

“Mr. Sah exploited this terrible pandemic for personal gain—and he should be held accountable to the American people for that behavior,” said U.S. Attorney Erin Nealy Cox in a statement. “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.”

There has been a spike in the number of reports of suspected business loan fraud filed by banks that coincided with the disbursement of billions of dollars’ worth of PPP loans in July.  At least 50 PPP-related fraud indictments have been brought by the Justice Department to date. Among those charged with fraud in connection to the program are a former NFL football player and a former reality TV star. Like the accused from Texas, many of the charged individuals are accused of using the loan proceeds to purchase luxury items for themselves.

Federal fraud charges are serious offenses that carry severe penalties and hefty fines. Anyone suspected of committing fraud in connection to federal COVID-19 relief programs should immediately seek legal counsel. An attorney can review the allegations, find out what your legal options are, and help to reduce the penalties of conviction or avoid a conviction altogether.

South Florida Fraud Defense Attorney

Are you accused of committing fraud in South Florida involving COVID-19 relief programs? Contact Brian Silber, P.A. to set up a free initial consultation with one of South Florida’s most experienced fraud defense attorneys.

Source: 10.9.20 Texas man charged in $24 million COVID-relief fraud.pdf

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