A Chinese national living in New York tried to bilk the federal government and banks out of tens of millions of dollars in coronavirus relief loans by requesting the money for “small businesses” that only employed him, federal prosecutors said Thursday.
Muge Ma, 36, who goes by the name Hummer Mars, was arrested Thursday and hit with one count of bank fraud, one count of wire fraud, and one count of making false statements to a bank for the scheme, said Geoffrey Berman, the US attorney for the Southern District of New York.
Ma allegedly applied for $20 million in government-backed loans from the Small Business Administration and five banks, claiming his two companies employed hundreds of people and paid them millions of dollars each month.
To pass off the companies as legit, Ma submitted falsified bank records, tax records, payroll records and financial statements, prosecutors charged.
He described one of the companies as a “patriotic American” firm that does cloud computing and built a website for it with photos of him and “employees” meeting with notable officials, including Gov. Andrew Cuomo, according to court papers.
He also allegedly contacted a Canadian company that manufactures COVID-19 tests and falsely claimed his company was a vendor of New York state in buying the testing kits, prosecutors alleged.
Before his scheme was exposed, the SBA allowed a $500,000 loan to one of the companies and $150,000 to the other, according to prosecutors.
A private bank also granted an $800,000 loan backed by the Paycheck Protection Program, which was frozen after the alleged ruse was exposed.
“Small businesses are facing uncertainty and unprecedented challenges, the least of which should be opportunists attempting to loot the federal funds meant to assist them,” Berman said in a statement.
“This Office, along with our law enforcement partners, will continue to vigilantly protect the integrity of those critical loan programs,” he added.