Moustapha Diakhate, COVID-19 Relief Funds Fraud, Connecticut 2023

Stamford Man Sentenced to Prison for COVID-19 Relief Funds Fraud

Moustapha Diakhate, 46, of Stamford, was sentenced to 42 months of imprisonment for fraudulently obtaining more than $4 million in COVID-19 relief funds guaranteed by the U.S. Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

The 42-month prison sentence, handed down by U.S. District Judge Michael P. Shea in Hartford, will be followed by three years of supervised release. Diakhate was also ordered to serve three months in home detention when he is released from prison and to perform 75 hours of community service while on supervised release.

Diakhate maintained an ownership or management interest in certain small business entities, including Ansonia Developers LLC, Winsbay Inc., Buyers Association Group LLC, Washington Management LLC, Diakhate Capital, Inc., and Poulson & Gold Inc. He provided false and fraudulent information during the PPP loan application process to obtain PPP loans for each of his six entities totaling more than $4 million.

The funds were intended to help small businesses retain employees and cover certain expenses during the COVID-19 pandemic. Diakhate, however, used a portion of the funds for personal expenses, including paying off a loan to purchase a 2010 Porsche Panamera Turbo, buying a Mercedes and BMW, and purchasing a $50,000 certificate of deposit.

Citibank and M&T Bank successfully recovered more than $2 million after discovering Diakhate's fraud. Judge Shea ordered Diakhate to pay restitution of $1,702,479.

Diakhate was arrested on a federal criminal complaint on May 7, 2021. On January 26, 2022, he pleaded guilty to one count of wire fraud and one count of making an illegal monetary transaction. He was released on a $450,000 bond and is required to report to prison on October 14.

The matter was investigated by the Small Business Administration Office of Inspector General, Federal Bureau of Investigation, and Internal Revenue Service – Criminal Investigation. The case was prosecuted by Assistant U.S. Attorney Christopher W. Schmeisser.

Source: https://www.justice.gov/usao-ct/pr/stamford-man-sentenced-prison-fraudulently-obtaining-more-4-million-covid-19-relief-funds