Chinese national charged with trying to steal $20M in coronavirus relief funds

A Chinese national living in New York was charged Thursday with trying to steal more than $20 million in federal Paycheck Protection Programs loans, the biggest fraud case brought so far by federal prosecutors involving government loans to rescue small businesses hurt by the coronavirus crisis.

Muge Ma, also known as Hummer Mars, allegedly told the Small Business Administration and five banks that his two businesses employed hundreds who earned millions of dollars in monthly wages, the Justice Department said.

Federal prosecutors say he was the only employee of the two companies, Hurley Human Resources and New York International Capital LLC.
Mr. Ma had received roughly $1.5 million in funds from the banks before investigators caught onto the scheme, the Justice Department said.

Prosecutors said Mr. Ma also fudged other details of his business ventures, including claiming they were located in a luxury condominium in Manhattan and representing himself as a U.S. citizen, when he is a Chinese national who obtained permanent U.S. residence.

Mr. Ma also submitted phony financial statements to the bank and doctored some bank, tax, insurance and payroll records, according to court records.

In a separate scheme, Mr. Ma fraudulently told a COVID-19 test kit manufacturer that his business, New York International Capital LLC, was representing New York state and Gov. Andrew Cuomo in obtaining test kits and protective equipment, according to the Justice Department.

Mr. Ma said in a recorded phone call with the manufacturer that he was a registered vendor for the state and had “a big team” working on a deal for New York, prosecutors alleged.

Prosecutors said none of Mr. Ma’s claims about his “team” or representing the state were true.

“There are many people in desperate need of federal money right now to get them through an unbelievably difficult time. The last thing they need to hear is that a fraudster allegedly tried to steal millions of dollars for his own selfish use,” FBI Assistant Director William F. Sweeney Jr. said in a statement.

Mr. Ma faces a host of criminal charges including bank fraud, wire fraud, making false statements to the bank, fraud against the United States and making false statements to the Small Business Administration.

If convicted on all counts, Mr. Ma could receive up to 107 years in federal prison.

Congress passed the CARES Act in March to provide emergency financial assistance to the nation’s small businesses amid the economic damage wrought by the coronavirus and state-related shutdown orders. It established the Paycheck Protection Program, which doled its entire $349 billion for small businesses to retain jobs, meet payroll costs, and cover rent and utilities.

Lawmakers last month authorized an additional $310 billion in PPP funding.
Allegations of fraud in PPP loan applications have bubbled up in recent weeks.

Earlier this month, two New England men were the first two to be charged with fraudulently applying for PPP loans. That was quickly followed by an Atlanta-based reality TV star who is accused of using his PPP money to buy diamond jewelry and a Rolex watch and to pay for child support.

Also ensnared in charges of PPP fraud was a Texas engineer who prosecutors say filed a fraudulent bank loan application seeking $10 million for 250 employees the government says don’t exist. And earlier this week, another Texas man was accused of using an Internet random name generator to create nearly 500 phony employees to obtain $5 million in PPP loans.