Man Admits Using Fake Cos. To Score $20M In Virus Loans

By Max Jaeger
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Law360 (June 15, 2021, 6:41 PM EDT) -- A UCLA-educated Chinese national pled guilty in New York federal court on Tuesday to lying about his citizenship and creating phony "patriotic American" businesses in a bid to fraudulently obtain $20 million in federal coronavirus relief loans.

Muge Ma, also known as "Hummer Mars," copped to one count each of bank fraud and aggravated identity theft during an in-person hearing in Manhattan, a representative for prosecutors confirmed.

"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," Manhattan U.S. Attorney Audrey Strauss said in a statement. "Now Muge Ma awaits sentencing for his admitted criminal skulduggery."

Ma, a permanent U.S. resident with a UCLA business degree, got forgivable loans via the Paycheck Protection Program and low-interest loans through the Economic Injury Disaster Loan program by falsely telling the U.S. Small Business Administration and banks that his companies had hundreds of employees, according to the feds.

He was arrested in May 2020 and indicted on nine counts including major fraud against the United States, wire fraud and several counts for making false statements.

From March 2020 through May 15 that year, Ma allegedly asked the SBA and five banks for loans to prop up his companies, New York International Capital LLC and Hurley Human Resources LLC, which he operated from his $1.5 million luxury Manhattan condo and claimed employed hundreds of people.

"In truth, Ma appears to be the only employee of either company, and he had no legitimate claim to the funds for which he applied," Strauss said Tuesday.

Banks issue PPP loans, which are backed by the SBA, based on how many workers a business pays. Ma submitted doctored tax, insurance, payroll and auditing records to banks in support of the fiction that he ran a pair of "global" companies with scores of workers, the government said.

Ma allegedly claimed one company was a "patriotic American" COVID-19 test kit manufacturer and the other would help "unemployed American workers" adrift in the pandemic economy. Prosecutors say he also lied about his citizenship status and used another person's identity in service of the scheme.

He managed to get approvals for loans and advances totaling $660,000 through the EIDL program and $800,000 from the PPP before investigators caught onto the ruse and froze the funds, the government said.

U.S. District Judge Richard Berman has repeatedly deemed Ma a flight risk. The 37-year-old businessman has been inside Manhattan's Metropolitan Correctional Center since his arrest.

Ma announced he'd begun plea talks in September 2020. His sentencing is scheduled for Sept. 22, 2021, officials said.

His lawyer declined to comment.

Ma is represented by Peter Neil Katz of Law Offices of Peter Katz LLC.

The government is represented by Sagar Kananur Ravi of the U.S. Attorney's Office for the Southern District of New York.

The case is USA v. Ma, case number 1:20-cr-00407, in U.S District Court for the Southern District of New York.

--Additional reporting by Pete Brush. Editing by Amy Rowe.

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