What to Know
- A Manhattan resident has been charged for a fraudulent scheme to obtain over $20 million in government-guaranteed loans designed to provide relief to small businesses during the COVID-19 pandemic, federal prosecutors announced Thursday
- Muge Ma, 36 and from Manhattan, is charged with bank fraud, wire fraud and making false statements to a bank among other charges, prosecutors say
- Prosecutors also say that one of Ma's bogus companies also fraudulently claimed that it was representing New York State in procuring COVID-19 test kits and personal protective equipment in response to the pandemic
A Manhattan resident has been charged for a fraudulent scheme to obtain over $20 million in government-guaranteed loans designed to provide relief to small businesses during the COVID-19 pandemic, federal prosecutors announced Thursday.
Muge Ma, 36 and from Manhattan, is charged with one count each of bank fraud, wire fraud, and making false statements to a bank -- each of which carries a maximum sentence of 30 years in prison, according to Manhattan U.S. Attorney Geoffrey S. Berman. He also faces one count of major fraud against the United States, which carries a maximum sentence of 10 years in prison, one count of making false statements, which carries a maximum sentence of five years in prison, and one count of making false statements to the U.S. Small Business Administration, which carries a maximum sentence of two years in prison.
Ma's arrests are in connection with loan applications for relief available from the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) Program. According to prosecutors, Ma falsely represented to the U.S. Small Business Administration and five banks that his companies, New York International Capital LLC (NYIC) and Hurley Human Resources LLC, had hundreds of employees and paid millions of dollars in wages to those employees, however, Ma allegedly was the only employee.
Prosecutors also say that NYIC also fraudulently claimed that it was representing New York State in procuring COVID-19 test kits and personal protective equipment in response to the pandemic.
Attorney information for Ma, also known as "Hummer Mars," was not immediately known.
"Ma’s alleged attempts to secure funds earmarked for legitimate small businesses in dire financial straits are as audacious as they are callous, and now he now faces federal prosecution. Small businesses are facing uncertainty and unprecedented challenges, the least of which should be opportunists attempting to loot the federal funds meant to assist them," Berman said.
According to the allegations contained in the complaint unsealed Thursday in Manhattan federal court, Ma applied to the Small Business Administration and to at least five banks for a total of more than $20 million in government-guaranteed loans for his companies from March 2020 to at least May 15.
Before the discovery of the fraudulent conduct by Ma, the SBA approved a $500,000 EIDL Program loan for his company NYIC and a $150,000 EIDL Program loan for his company Hurley Human Resources, and at least a $10,000 loan advance was provided to NYIC, according to the complaint.
Additionally, the bank allegedly approved and disbursed about $800,000 in PPP loan funds for Hurley Human Resources, however, they were ultimately frozen in connection with the federal investigation into Ma's alleged scheme. According to prosecutors, this resulted in Ma seeking to withdraw his loan applications from the banks and return the funds.
“There are many people in desperate need of federal money right now to get them through an unbelievably difficult time," FBI Assistant Director William Sweeney Jr said. "The last thing they need to hear is that a fraudster allegedly tried to steal millions of dollars for his own selfish use. We hope this serves as a demonstration to other criminals plotting a similar scam – we are acting and investigating in real time to stop anyone using this crisis as a means to rip off the federal government and the tax payers who fund that government.”
At a hearing late Thursday, Ma was ordered held without bail after prosecutors said he was a flight risk, a spokesman for the Manhattan U.S. Attorney said.