A man in the Santa Clarita Valley pleaded guilty on Monday to carrying out a scheme to fraudulently obtain around $ 1.8 million in COVID-19 relief after transferring the money to a bank account in Uganda.
The money was secured through the Small Business Administration (SBA), Economic Disaster Loan Program (EIDL), and Paycheck Protection Program (PPP).
Hassan Kanyike, 29, of Santa Clarita, admitted to submitting six fraudulent PPP loan applications and two fraudulent EIDL applications, according to court documents.
“The claims were seeking funds to allegedly pay the salaries of employees he claimed worked for two of his companies,” the court document read.
Kanyike successfully raised about $ 1 million from four PPP loans and an additional $ 300,000 from two EIDL loans, officials said.
In support of the fraudulent PPP loan applications, Kanyike submitted false federal tax returns and payroll reports.
“For example, in a loan application, Kanyike falsely claimed that the company had 26 employees and an average monthly payroll of $ 168,000, and he submitted a fabricated IRS tax form claiming that Falcon Motors had paid 2,022,300 $ in payroll in 2019, ”court officials said.
However, Kanyike admitted during his plea that the company has significantly fewer employees and a significantly lower payroll, officials said.
Kanyike further admitted to obtaining additional employer identification numbers from the IRS in April and May 2020, so he could apply for multiple loans for the same used car company.
Kanyike then used a “substantial” portion of the proceeds from the PPP loan for his own personal benefit.
Kanyike was arrested in December 2020 at Los Angeles International Airport just before boarding 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 commercial 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 U.S. District Judge Virginia A. Phillips.
He is expected to be sentenced on August 23 and faces a maximum sentence of 20 years in prison.
As part of his guilty plea, Kanyike must pay around $ 1.3 million in restitution.
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