Paul Kwak, Economic Impact Disaster Loan Program Fraud, Georgia 2021

Grimy Times

ATLANTA – In a brazen scheme to defraud the US Small Business Administration, Paul Kwak and Michelle Kwak, a couple from Braselton, Georgia, have been indicted on charges arising out of a scheme to defraud the Economic Impact Disaster Loan (“EIDL”) Program.

The indictment alleges that Paul Kwak, 63, and Michelle Kwak, 60, conspired to submit fraudulent EIDL applications in the names of shell companies that had no employees and conducted no business activities, to the tune of millions of dollars. An EIDL application must provide, among other information, the amount of revenue the business generated in the 12 months prior to the application and the number of employees. The applicant must certify, under penalty of perjury, that the information is correct and that he or she is legally eligible to apply for an EIDL.

The Kwaks are allegedly connected to over 70 fraudulent EIDL applications, of which about half were successful, resulting in over $4 million in fraudulent loans. Paul Kwak has even posted related videos on his YouTube channel, where he explained that applicants can receive tens of thousands of dollars in assistance without collateral or a co-signor, using only the applicant’s electronic signature.

“Fraudulent applications divert the limited pool of funds Congress allocated for pandemic relief from legitimate businesses in need of assistance,” said Acting U.S. Attorney Kurt R. Erskine. “By defrauding the Small Business Administration, the defendants harmed hardworking business owners whom the CARES Act was intended to help.”

Paul Kwak and Michelle Kwak were indicted by a federal grand jury on May 18, 2021. Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.

The case is being investigated by the Federal Bureau of Investigation, and Assistant U.S. Attorney Michael S. Qin is prosecuting the case. The public can contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016 for further information.

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