A tech executive from Washington state has been sentenced to 2 years in prison for perpetrating a scheme to fraudulently obtain COVID-19 disaster relief loans guaranteed by the Small Business Administration (SBA) through the Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief and Economic Security (CARES) Act.
Mukund Mohan, 48, of Clyde Hill, pleaded guilty to charges of wire fraud and money laundering on March 15, 2021. Mohan submitted eight fraudulent disaster loan applications seeking over $5.5 million in relief funds.
According to court documents, Mohan submitted fake and altered documents, including fake federal tax filings and altered incorporation documents, to support the fraudulent loan applications. For example, Mohan misrepresented to a lender that, in 2019, his company Mahenjo Inc. had dozens of employees and paid millions of dollars in employee wages and payroll taxes.
In support of Mahenjo’s loan application, Mohan submitted false incorporation documents and tax forms suggesting the company had been in business prior to 2020. In truth, Mohan purchased Mahenjo in May 2020 and, at the time he purchased the company, it had no employees and no business activity.
The incorporation documents he submitted to the lender were altered and the federal tax filings he submitted were fake. Five of Mohan’s eight fraudulent loan applications were approved, and he fraudulently obtained nearly $1.8 million in COVID-19 relief funds.
In addition to the prison sentence, Mohan was ordered to pay a fine in the amount of $100,000 and $1,786,357 in restitution. Mohan’s scheme is a prime example of how individuals can abuse the benefit programs under the CARES Act to unjustly enrich themselves.
“When individuals like Mr. Mohan abuse the benefit programs under the CARES act to unjustly enrich themselves, they are stealing from those that are the most vulnerable,” said Acting Special Agent in Charge Corinne Kalve of IRS Criminal Investigation (IRS:CI).
Key Facts
- State: Washington
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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