Chinese national in New York pleads guilty to $20M COVID fraud scheme
Prosecutors said he also claimed he was a U.S. citizen, when in fact he just had a lawful permanent resident status
A Chinese national living in Manhattan has pleaded guilty to trying to fraudulently obtain $20 million from government-guaranteed relief loans intended for small businesses struggling through the COVID-19 pandemic.
Muge Ma, who also goes by the name "Hummer Mars," is charged with bank fraud and aggravated identity theft – crimes which he carried out from his luxury Manhattan condominium, according to prosecutors. Ma, 37, was arrested in May and has remained incarcerated as a flight risk ever since.
In the course of carrying out his illicit scheme, Ma applied to at least five banks and claimed to be paying hundreds of employees millions of dollars in wages through two companies he controlled, prosecutors said.
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Ma described one of the companies as a "patriotic American" firm, and said the other company would help the country reduce the high unemployment rate caused by the pandemic by helping unemployed American workers and unemployed American graduates find jobs "as quickly as possible," U.S. Attorney Geoffrey Berman, who represents the Southern District of New York, said in a statement.
Ma supported his claims by submitting phony bank, tax, insurance and payroll records and provided banks with links to websites that described the companies as "global."
U.S. Attorney Audrey Strauss said Ma appeared to be the only employee of either company and had no legitimate claim to the funds for which he applied.
"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," she said.
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Prosecutors said he also claimed he was a U.S. citizen, when in fact he just had a lawful permanent resident status.
A bank approved and disbursed over $800,000 in loan funds for one of Ma's companies, although the money was frozen during the investigation. Another $650,000 in loans had been approved and a $10,000 loan advance had been provided.
On Tuesday Ma signed a prosecuting agreement which recommends he be sentenced to between six and seven years in prison, including a two-year mandatory prison sentence on the aggravated identity theft charge.
Prosecutors said that although his plea deal contained language which made it seem that he would be deported, his lawyer, Peter Katz, told Judge Richard M. Berman that the words were common in legal documents, regardless of the crimes.
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"In our opinion, he won't be," Katz said of deportation. Still, he added: "He understands it is a possibility."
Ma’s sentencing is scheduled to begin in late September.
Fox Business’ Stephanie Pagones and The Associated Press contributed to this report.