According to court documents, Hassan Kanyike, 29, of Santa Clarita, admitted that he submitted six fraudulent PPP loan applications and two fraudulent EIDL applications. The applications sought funds to purportedly pay the salaries of employees whom he claimed worked for two of his businesses. Kanyike successfully obtained approximately $1 million through four PPP loans, and another $300,000 through two EIDL loans.
In support of the fraudulent PPP loan applications, Kanyike submitted fake federal tax filings and payroll reports. For example, in one loan application, Kanyike falsely claimed the business had 26 employees and an average monthly payroll of $168,000, and he submitted a fabricated IRS tax form claiming Falcon Motors had paid $2,022,300 in payroll in 2019. But Kanyike admitted during his plea that the company had substantially fewer employees and substantially lower payroll.
Kanyike further admitted that he obtained additional Employer Identification Numbers from the IRS in April and May 2020, so that he could apply for multiple loans for the same used-car business. Kanyike then used a substantial portion of the PPP loan proceeds for his own personal benefit.
Kanyike was arrested in December 2020 at Los Angeles International Airport just before he was about to board a flight to Dubai. At the time of his arrest, Kanyike had transferred approximately $762,000 to Uganda, his country of citizenship, from one of the business accounts that had received the loan proceeds, in violation of the terms of the PPP and EIDL program.
Kanyike pleaded guilty to one count of wire fraud in the Central District of California. He is scheduled to be sentenced on Aug. 23, and faces a maximum penalty of 20 years in prison. As part of his guilty plea, Kanyike is required to pay approximately $1.3 million in restitution. 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 U.S. Attorney’s Office for the Central District of California; Special Agent in Charge David A. Prince of the Los Angeles Field Office of Homeland Security Investigations (HSI); and Inspector General J. Russell George of the U.S. Treasury Inspector General for Tax Administration (TIGTA) made the announcement.
Source: U.S department of justice