A Chinese national has been sentenced to more than four years in prison over a scheme to defraud $20 million in federal pandemic relief loans meant for distressed small businesses.
New York resident Ma Muge falsely claimed to have hundreds of employees under two phony companies, New York International Capital LLC (NYIC) and Hurley Human Resources LLC (Hurley), to whom he said he paid millions of dollars in wages monthly, according to federal prosecutors.
In reality, Ma, who also goes by the name “Hummer Mars,” was the only employee in both companies, which he said were based in his luxury condo building in Manhattan.
To obtain the funds, the 38-year-old submitted doctored and fraudulent financial records to the Small Business Administration and at least six banks between March and May 2020, prosecutors said. He had made loan applications for relief under the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) Program.
Links to the websites he provided in the loan applications described the companies as “global.”
The NYIC website casts the company as a “Blue-blooded AMERICAN World’s Leading Cloud Investment Bank” that could connect clients with more than 5,000 strategic partners in less than two weeks.
Ma also lied that he was a U.S. citizen when he was in fact a permanent resident of the United States. He also used the name and identity of another person in one fraudulent loan application. He lied that NYIC was representing New York State to procure COVID-19 test kits and personal protective equipment, prosecutors said.
Before the discovery of the scheme, the Small Business Administration approved a $500,000 EIDL to NYIC, and another $150,000 for Hurley. It made at least a $10,000 loan advance to NYIC. A bank also separately gave around $800,000 PPP loan funds to Hurley, which have been frozen under the probe.
Justice Department filings showed that Ma spent a portion of the $10,000 at a consumer electronics store and a department store.
Several banks ultimately denied his application due to concerns of potential fraud. Ma was arrested in May 2020 and pleaded guilty last June. He had since withdrawn his loan applications and returned the funds, according to the prosecutors.
Ma came to the United States in 2011 on a student visa. At a sentencing hearing in Manhattan on April 21, he repeatedly expressed remorse for his deeds.
“I love America,” Ma said, the Associated Press (AP) reported. “I’m very, very sorry to my country, America.”
He decried the jail conditions over the last two years as “dirty, harsh, extremely cruel.” “I detest myself so much,” he said.
The self-reproach reached such a point that U.S. District Judge Richard M. Berman, who announced his prison term, interrupted Ma, telling him: “Mr. Ma, I don’t have any doubt about how sorry you are.”
“I’m not seeking blood from you,” the judge said before he urged Ma to stop dwelling on his crimes and focus on how he can be successful in the future, according to AP.
U.S. Attorney Damian Williams noted that Ma had exploited the opportunity within days of Congress authorizing billions of dollars to help small businesses struggling under the pandemic shutdowns.
“Muge Ma saw it as an opportunity to enrich himself by applying for millions of dollars in funds to pay wages to hundreds of employees that never existed,” he said in an April 21 statement.