A group of around 14 people, including several business owners and employees of Indian origin, have been charged in a massive fraud scheme involving a COVID-19 pandemic relief program in the US state of Texas.
The case, considered the largest investigation to date by the Pandemic Response Accountability Committee (PRAC) Fraud Task Force, has led to the arrest of defendants across Texas, California and Oklahoma.
The defendants are alleged to have defrauded the proceeds of the Paycheck Protection Program (PPP), a financial program introduced during the COVID-19 pandemic, as well as more than $53 million in loans to various financial institutions.
Leigha Simonton, the U.S. Attorney for the Northern District of Texas, stressed the importance of the allegations, saying that “defrauding the government is an insult to American taxpayers.” Cheating the government during a pandemic – at a time when millions of hardworking entrepreneurs were struggling to work. Salary and rent – pouring salt on the wound. “
“These defendants conspired to steal millions of dollars from the PayCheck Protection Program—funds that could help legitimate businesses pay their bills and keep their employees floating.”
The 14 people face a 16-count indictment, including conspiracy to commit bank fraud, bank fraud, wire fraud, making false statements and conspiracy to commit money laundering.
The accused submitted fraudulent PPP loan applications, manipulated bank statements and tax forms to inflate salary costs.
They created a false paper trail of payroll expenses by routing loan funds through multiple bank accounts.
Among the accused are Mihir Patel, chief financial officer of Sunshine Recycling, as well as owners and employees of various businesses including the Mammoth Group, R.A. Industries, L.K. Industries, West Texas Scrap, Gulf Coast Scrap, 4G Metals, West Texas Equipment, NTC Industries, Sunshine Recycling, Level Eight, Elephant Recycling, Nanosoft Technologies and others.
The PPP, established under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, aims to provide financial assistance to individuals and businesses affected by the pandemic. It offers forgivable loans to small businesses to cover payroll and certain business expenses. The program ended in May 2021.
If convicted, the defendants face up to 30 years in federal prison for each count of conspiracy to commit bank fraud, bank fraud and aiding and abetting, bank fraud, and making false statements to the Federal Deposit Insurance Commission (FDIC). ) In addition, they face up to 20 years in prison for wire fraud and 10 years for conspiracy to commit money laundering.
