California man pleads guilty to multi-million dollar PPP loan fraud scheme

0

A California man has pleaded guilty to conspiring with others in schemes involving millions of dollars in inflated tax returns and exploiting the Paycheck Protection Program (PPP).



California man pleads guilty to tax evasion and PPP loan

According the ministry of justice, Thanh Ngoc Rudin and his brother along with others conspired to commit two sets of fraudulent schemes. One involves filing bogus income tax claims on behalf of at least nine professional athletes and another involves falsifying records to fraudulently obtain Paycheck Protection Program (PPP) loans. The two schemes resulted in total losses of over $25 million.

Expenses

On the first count, 58-year-old Thanh Ngoc Rudin, who was a director of Mana Tax Services, a tax preparation company, and his co-conspirators conspired to prepare and file with the IRS. This includes a series of false and fraudulent tax returns on behalf of at least nine professional athletes. The false tax returns reported fabricated business and personal losses to generate reimbursements to which the athletes were not entitled.

The co-conspirators told professional athletes that Mana Tax could also alter previous year’s tax returns to correct alleged errors made by the athletes’ former accountants to obtain additional refunds they were not entitled to. . Mana Tax then charged the athletes a fee of 30% of the resulting refund.

On the second count, Rudin and his co-conspirators used Mana Tax to apply for PPP loans on behalf of several small businesses, fictitious entities controlled by the co-conspirators themselves with few or no employees, and business entities controlled by others.

In an effort to fraudulently obtain the PPP loans, the co-conspirators had grossly inflated the number of employees and monthly salary costs claimed on PPP loan applications and submitted fabricated tax returns in support of the claims. In exchange for processing the applications, Mana Tax again charged a fee of 30% of the value of the loan received.

During the investigation, the government was able to seize more than $11.8 million from bank accounts containing the proceeds of the PPP loan fraud controlled by the conspirators. Additionally, another co-conspirator, Seir Robinson Havana, vice president of Mana Tax Services, handed over cashier’s checks worth approximately $5.6 million, representing part of the fees charged to professional athletes. for the preparation of their false tax returns, and part of the costs. accused of obtaining fraudulent PPP loans.

Rudin is due Nov. 9 and faces a maximum sentence of five years in prison for conspiracy and 20 years in prison for wire fraud.

The federal government is cracking down on fraudsters

To quell rising PPP fraud cases, the Biden administration in March appointed a special prosecutor on PPP fraud. This decision complements pre-existing measures to prosecute fraudsters at the state and federal levels.

The measures have helped indict more people and businesses in more than 1,000 criminal cases and more than 200 civil investigations of 1,800 people and entities involving billions of dollars in alleged fraud since May 2021.

Receive the latest headlines from Small Business Trends. follow us on Google News.

Image: Depositphotos


More in: PPP Loans
Share.

Comments are closed.