Washington, D.C. Business Owner Pleads Guilty To Wire Fraud For PPP Scheme

Now that we are two years into the COVID-19 pandemic, business owners in the Washington, D.C. area and elsewhere have gotten used to living with uncertainty.  With rising prices and with the knowledge that a new COVID variant even more destructive than omicron could come along at any time, business owners have to be resourceful in finding ways to generate funds and to adapt to whatever life throws their way.  By now, the beginning of the pandemic seems like ancient history; it feels like a lifetime ago that business owners applied for Paycheck Protection Program (PPP) loans to tide them over during the shutdowns of 2020.  PPP loans helped numerous small businesses stay afloat, but because the funds were disbursed so quickly with such a perfunctory verification process, some PPP funds ended up in the hands of fraudsters, and this week, a Washington DC man has pleaded guilty to misappropriating millions of dollars in PPP funding.  If you are applying for business loans and want to make sure that you are staying on the right side of the law, a Washington DC small business lawyer can help you.

D.C. Man Pleads Guilty to Obtaining $2.38 Million in PPP Funds by Fraud

Elias Eldabbagh of Washington, D.C. owns a company called Alias Systems.  When the Small Business Administration began accepting PPP loan applications in the spring of 2020, Eldabbagh submitted multiple applications.  On some of them he used his own name and the name of his company, but he submitted other applications under assumed names. As supporting documentation for the PPP loan applications, he presented falsified tax returns and payroll records.  In total, he requested approximately $31 million, but the amount that he received was closer to $2,3800,000.

Eldabbagh lived large off of the proceeds of his PPP fraud.  He bought a Tesla Model 3 electric cat and high-end electronics, spent money on travel and dog boarding, and still had plenty left over to deposit in bank accounts and invest in cryptocurrency.  In May 2021, IRS-CI executed seizure warrants on some of his accounts, but Eldabbagh attempted to move his money out of the targeted accounts.  In April 2022, Eldabbagh pleaded guilty to wire fraud and money laundering. He forfeited the Tesla and the contents of 21 bank accounts.  He also promised to liquidate his cryptocurrency investments and hand over the proceeds to the U.S. government.  He spent $288,000 on at least 43 different cryptocurrencies, but the current value of the investments is unknown.  The maximum sentence for those charges is 20 years in prison, but prosecutors are more likely to recommend 11 to 14 years.

Contact Tobin O’Connor Concino P.C. About Staying Out of Trouble With Business Loans

You will not go to prison for business loans unless you intentionally submit false information, but honest mistakes can also have heavy financial costs.  A Washington, D.C. business dispute lawyer can help you ensure that your business loan applications are accurate and that you are eligible for funds.  Contact Tobin O’Connor Concino P.C. for help today.

Sources:

justice.gov/usao-dc/pr/dc-man-pleads-guilty-attempting-steal-more-30-million-covid-19-funds

wtop.com/dc/2022/04/dc-man-steals-over-2-million-in-covid-19-funding/

washingtonpost.com/dc-md-va/2022/04/09/guilty-plea-covid-relief-fraud/