Audrey Strauss, the US Attorney for the Southern District of New York, announced that MUGE MA, aka “Hummer Mars,” a Chinese citizen residing in New York, New York, was today in connection with a fraudulent program to obtain Government-guaranteed loans of over $ 20 million to provide relief to small businesses during the novel coronavirus / COVID-19 pandemic. In connection with loan applications for relief from the Paycheck Protection Program (“PPP”) and the Economic Injury Disaster Loan (“EIDL”) Program, MA has falsely represented to the US Small Business Administration (“SBA”) and at least five financial institutions that his New York International Capital LLC (“NYIC”) and Hurley Human Resources LLC (“Hurley”) companies had hundreds of employees and paid millions in wages when, in reality, MA was the sole employee of his firms. MA was previously arrested on May 21, 2020 and has been in custody since his arrest. He pleaded guilty to U.S. District Judge Richard M. Berman today and is due to be sentenced on September 22, 2021 at 11:00 a.m.
Manhattan US Attorney Audrey Strauss said, “As he admitted in court today, Muge Ma attempted to secure over $ 20 million in government-guaranteed loans for companies affected by the Coronavirus / COVID-19 Pandemic were destroyed. In order to promote the plan, Ma falsely presented to banks and the SBA that he owned two companies with hundreds of employees and paid millions in wages. In truth, Ma appears to be the only employee of either company, and he had no legitimate claim to the funds requested. Small businesses face uncertainty and unprecedented challenges, the slightest of which should be opportunists trying to loot the federal funds that are supposed to help them. Now Muge Ma is waiting to be convicted of his admitted criminal outrage. “
According to the allegations contained in public files in Manhattan Federal Court:
The Coronavirus Aid, Relief and Economic Security (“CARES”) Act is federal law passed March 29, 2020 and aims to provide emergency financial aid to millions of Americans suffering from the economic repercussions of the COVID-19 pandemic grant. One source of relief from CARES has been the approval of hundreds of billions of dollars in forgivable loans to small businesses for job retention and certain other expenses through the SBA’s PPP. According to the CARES Act, the amount of PPP funding a company can receive is determined by the number of employees in the company and their average wage costs. Companies applying for a PPP loan must provide evidence that they have previously paid their employees the compensation specified in the loan application. The CARES Act also expanded the separate EIDL program, which provided small businesses with low interest loans of up to $ 2 million that can provide vital economic support to help offset the temporary loss of income they suffer from COVID-19, to overcome.
From at least March 2020 to at least about May 15, 2020, MA applied to the SBA and at least five banks a total of over $ 20 million in government guaranteed loans for its NYIC and Hurley (collectively, the “Ma Companies”) through the PPP and the SBA’s EIDL program. In connection with these loan applications, MA represented, among other things, that he was the sole owner and director of the Ma Companies, that the Ma Companies were on the sixth floor of its luxury condominium building in New York, New York, and that NYIC and Hurley together have hundreds of employees and paid millions of dollars in wages to these employees every month. In fact, however, MA appears to have been NYIC’s only employee since at least 2019, and Hurley does not appear to have any employees. In order to substantiate the misrepresentation by MA in the loan applications about the number of employees at and the wages paid, the MA Companies, MA have fraudulent and forged bank records, tax records, insurance records, pay slips and / or audited financial statements to five different banks as well as links to the Ma Companies websites, which they describe as supposedly “global” companies. In the course of these loan applications, MA also misrepresented that he was a U.S. citizen when in fact he was a Chinese citizen with legal permanent residency in the United States. MA has also used someone else’s name and identity in connection with filing a fraudulent loan application and related documentation with at least one financial institution.
Prior to the exposure of MA’s fraudulent behavior, the SBA approved a $ 500,000 loan for the EIDL program for NYIC and a $ 150,000 loan for the EIDL program for Hurley, and NYIC was granted a loan advance of at least $ 10,000. In addition, a bank approved and disbursed approximately $ 800,000 in PPP loan funds for Hurley that was frozen in connection with this investigation. As a result, MA tried to withdraw its loan applications from the banks and return the funds.
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MA, 37, of New York, New York, pleaded guilty to one case of bank fraud with a maximum penalty of 30 years in prison and one case of aggravated identity theft with a mandatory minimum of two years on top of each other penalty imposed. The maximum possible sentences are prescribed by Congress and are given here for informational purposes only, as any conviction of the accused is determined by the judge.
Ms. Strauss praised the investigative work of the Financial Cybercrimes Task Force of the FBI, SBA-OIG and IRS-CI. Ms. Strauss also thanked the New York Department of Police, the Office of the New York State Comptroller, and the New York State Department of Labor for their assistance in the investigation.
Law enforcement in this case is carried out by the Office’s Complex Fraud and Cybercrime Division. Deputy Attorney General Sagar K. Ravi leads the indictment.