Alexander Barabash, Wire Fraud, Maryland 2020

Baltimore Man Pleads Guilty to $1.2M COVID-19 CARES Act Loan Scam

Alexander Barabash, age 52, of Baltimore, Maryland, pleaded guilty today to wire fraud, relating to the submission of fraudulent Coronavirus Aid, Relief, and Economic Security (“CARES”) Act loan applications.

The CARES Act was enacted in March 2020 to provide emergency financial assistance to Americans suffering from the economic effects caused by the COVID-19 pandemic. The guilty plea was announced by United States Attorney for the District of Maryland Erek L. Barron; Acting Special Agent in Charge Kareem A. Carter of the Internal Revenue Service – Criminal Investigation, Washington, D.C. Field Office; and Special Agent in Charge Ross Luciano of the United States Secret Service – Baltimore Field Office.

“Barabash fraudulently obtained more than $1.2 million in CARES Act loans intended to assist struggling businesses,” said Erek L. Barron, United States Attorney for Maryland. “CARES Act fraud is a continuing priority for this office and fraudsters will be held accountable for their actions.”

According to his plea agreement, between April 2020 and January 2021, Barabash submitted three fraudulent PPP loan applications on behalf of his construction company iDesignbuild LLC (“iDesignBuild”). Barabash is the sole owner and CEO of iDesignBuild and was the sole authorized signer of the company’s business bank account.

As detailed in the plea agreement, on April 9, 2020, Barabash submitted a PPP loan application falsely stating that iDesignBuild had four employees and an average monthly payroll of $18,750. In fact, the company did not have any employees, but engaged independent contractors for work-related matters. Based on the representations made in the fraudulent application, on April 23, 2020, Barabash received $46,800 in PPP loan proceeds in the iDesignBuild bank account.

Barabash used the fraudulently obtained loans to facilitate the purchase of two properties. He admitted that he submitted a third fraudulent loan application on behalf of iDesignBuild, representing that the company had 37 employees and an average monthly payroll of $525,227. The bank funded a PPP loan of $1,295,000, which was credited to iDesignBuild’s bank account on February 26, 2021.

“Investigating those who fraudulently acquired Coronavirus Aid, Relief, and Economic Security (CARES) Act relief funds will continue to be a focus of IRS-CI,” said Kareem A. Carter, Acting Special Agent in Charge, Washington, D.C. Field Office. “The CARES Act was put into place to assist those struggling financially due to the unprecedented COVID-19 pandemic, not for bad actors to buy cars and houses.”

Related Federal Cases