A Washington man has pleaded guilty to fraud and money laundering in a scheme to obtain $5.5 million from the Paycheck Protection Program (PPP) and hide the proceeds.
Mukund Mohan, 48, of Clyde Hill, submitted at least eight fraudulent PPP loan applications on behalf of six companies. According to the plea agreement, he made numerous false and misleading statements about the companies’ business operations and payroll expenses. Mohan is now facing a maximum penalty of 20 years in prison.
PPP is a $953 billion relief programme established by the US government to help businesses continue paying their workers through the Covid-19 pandemic. It offers low-interest private loans which don’t have to be paid back in part or in full if certain criteria are met, including maintaining stability of staff levels and wages.
In support of the fraudulent loan applications, Mohan submitted fake and altered documents, including fake federal tax filings and altered incorporation documents.
Court records show that 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 incorporation documents showing that he incorporated the company in 2018 and filed federal unemployment tax forms for 2019.
In truth, Mohan purchased Mahenjo on the Internet in May 2020 and, at 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.
Federal law enforcement agencies were able to seize nearly all of the federal loan funds from Moghan’s accounts before the money was spent or transferred.
Mohan will be sentenced on July 20.
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