Chinese man commits $20 million fraud on coronavirus aid programs, pleads guilty
A Chinese man who prosecutors say tried to get $20 million in federal aid for distressed businesses pleaded guilty Tuesday to two criminal charges.
Muge Ma entered the plea in Manhattan federal court to bank fraud and aggravated identity theft, admitting the fraud that authorities say he carried out from his luxury Manhattan condominium.
Judge Richard M. Berman noted that it was the first hearing conducted in his courtroom since the coronavirus forced a shutdown of most in-court proceedings in March 2020.
Ma, 37, has remained incarcerated as a flight risk since his May 2020 arrest, when prosecutors said he had applied to at least five banks for over $20 million in government-guaranteed loans from the Paycheck Protection Program and the Economic Injury Disaster Loan program. The programs were intended for businesses harmed by coronavirus shutdowns.
Authorities said he falsely claimed to be paying hundreds of employees millions of dollars in wages through two companies he controlled. To support the claims, he submitted fraudulent bank, tax, insurance and payroll records and provided banks with links to websites that described the companies as “global,” prosecutors said.
They said he also falsely asserted that he was a U.S. citizen, though he did have lawful permanent resident status.
“In truth, Ma appears to be the only employee of either company and he had no legitimate claim to the funds for which he applied,” U.S. Attorney Audrey Strauss said in a release.
“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,” she added.
According to prosecutors, a bank approved and disbursed over $800,000 in loan funds for one of Ma's companies, although the money was frozen during the investigation. They said another $650,000 in loans had been approved and a $10,000 loan advance had been provided.
A sentencing agreement with prosecutors that Ma signed Tuesday recommends he be sentenced to between six and seven years in prison, including a two-year mandatory prison sentence on the aggravated identity theft charge. Sentencing was scheduled for Sept. 22.
Ma's plea deal with prosecutors contained language that made it seem that Ma's deportation was very likely, if not mandatory, but his lawyer, Peter Katz, told Berman that the words were common in legal documents, regardless of the crimes.
“In our opinion, he won't be," Katz said of deportation. Still, he added: “He understands it is a possibility.”