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California Man Charged with COVID-Relief Fraud Scheme

April 26, 2021 / Source: FDIC OIG

PRESS RELEASE

A federal grand jury in Los Angeles, California, returned an indictment on April 13, charging a California man with stealing hundreds of thousands of dollars from the Paycheck Protection Program (PPP).

According to court documents, Oumar Sissoko, 59, of Temecula, submitted a PPP loan application on behalf of his company, Road Doctor California LLC, that sought and obtained $7.25 million. The loan application certified that the funds would be used to retain workers and maintain payroll or make mortgage-interest payments, lease payments, and utility payments. Between on or about May 1 to May 12, 2020, Sissoko misappropriated hundreds of thousands of dollars of the PPP loan proceeds to use for impermissible purposes, including the purchase of a luxury car for more than $100,000, the satisfaction of a loan made to Sissoko in connection with his prior acquisition of a different luxury car, and the purchase of a computer for almost $6,000. Sissoko also attempted to transmit approximately $150,000 to accounts in Mauritania associated with a different company for which Sissoko purports to serve as CEO.

Sissoko is charged with four counts of wire fraud. The defendant is scheduled for his initial court appearance at a later date in the U.S. District Court for the Central District of California. If convicted, he faces a maximum penalty of 20 years in prison for each count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Acting U.S. Attorney Tracy L. Wilkison of the Central District of California; Assistant Director in Charge Kristi K. Johnson of the FBI’s Los Angeles Field Office; Special Agent in Charge Weston King of the U.S. Small Business Administration’s Office of Inspector General’s (SBA-OIG) Western Region; and Special Agent in Charge Wade V. Walters of the San Francisco Regional Office of the Federal Deposit Insurance Corporation’s Office of Inspector General (FDIC-OIG) made the announcement.

The FBI, SBA-OIG and FDIC-OIG are investigating the case.

Trial Attorney John “Fritz” Scanlon of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Alexander C.K. Wyman of the Central District of California are prosecuting the case.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1%. PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal on the PPP loan to be forgiven if the business spends the loan proceeds on these expense items within a designated period of time after receiving the proceeds and uses at least a certain percentage of the PPP loan proceeds on payroll expenses. 

The Fraud Section leads the Department of Justice’s prosecution of fraud schemes that exploit the CARES Act. In the months since the CARES Act was passed, Fraud Section attorneys have prosecuted more than 100 defendants in more than 70 criminal cases. The Fraud Section has also seized more than $65 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real-estate properties and luxury items purchased with such proceeds. More information can be found at: https://www.justice.gov/criminal-fraud/cares-act-fraud.

Anyone with general information about allegations of attempted fraud involving COVID-19 can report it by calling the Justice Department’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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