Businessman Mukund Mohan of Clyde Hill, Washington state, has been imprisoned for two years after admitting fraud and money laundering to obtain $5.5m (€4.68m) from the US Paycheck Protection Program (PPP) and then hiding the proceeds.
He was also ordered to pay $1,786,357 in restitution and fined $100,000.
The department of justice had earlier disclosed that he submitted at least eight fraudulent PPP loan applications for six companies and made numerous false statements about the companies’ business operations and payroll expenses.
To support the applications, Mohan submitted fake and altered documents, including those for tax returns and business incorporation.
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 reality Mohan had purchased Mahenjo on the internet in May 2020 and, at that time, it had no employees nor business activity.
PPP is a $953bn US relief programme to help businesses continue paying their workers through the Covid-19 pandemic.