A New Jersey attorney was indicted on Tuesday with multiple counts of bank fraud for allegedly obtaining $9 million in federal Paycheck Protection Program (PPP) loans.
Jae H. Choi of Bergen County submitted four fraudulent applications for PPP loans to four lenders on behalf of four businesses that were said to provide educational services, according to filed documents and statements made in court. He allegedly lied about the existence of hundreds of employees on the application, manipulated bank records, and falsified a driver’s license—while stating that these companies paid over $3 million in monthly wages.
In one instance, Choi falsely claimed in an email to a lender that he told 150 of his employees that they would lose their jobs because the PPP loans had not come in. He wrote that he had “watched grown men and women crying” and added that he “sincerely hope[d]” that the lender’s employee “would never find [himself] in this kind of situation.”
Three of the four lenders provided Choi with an estimated $3 million of PPP loans each for three of the businesses.
The court documents also indicate that Choi put the $9 million of federal funds provided to him towards a million-dollar home in Cresskill, New Jersey; used approximately $30,000 for home remodeling and improvements; and invested millions more in the stock market using an account held in the name of his spouse.
He was indicted on four counts of bank fraud, four counts of false statements on a loan application, one count of aggravated identity theft, and one count of money laundering, according to U.S. Attorney Craig Carpenito and Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division. The indictment seeks the forfeiture of 11 bank accounts, one investment account, and the million-dollar home.
Enacted in March, the CARES Act was created to financially assist millions of Americans who experienced economic hardships as a result of the coronavirus pandemic. Up to $349 billion in forgivable loans were implemented as part of the CARES Act, funding expenses for struggling small businesses through the PPP. In April, Congress authorized the addition of over $300 billion to PPP funding.
Qualifying small businesses must use these loans for payroll, mortgages, rent and utilities in order for them to be forgiven within a set time period.
The case was investigated by IRS–Criminal Investigation Special Agent in Charge Michael Montanez; inspectors of the U.S. Postal Inspection Service; the Small Business Administration Office of the Inspector General; and the Social Security Administration–Office of the Inspector General.
An arraignment date for Choi has not yet been set.
Newsweek reached out to the Department of Justice for comment, but did not receive a response in time for publication. It is unclear whether Choi has an attorney.
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