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Law360 (June 22, 2020, 7:21 PM EDT) -- A Massachusetts man whose employees are based in India was charged with wire fraud in Boston federal court Monday for allegedly filing bogus loan applications for $13.5 million — and collecting $2 million — from the federal Paycheck Protection Program.
A criminal complaint unsealed on Monday alleged Elijah Majak Buoi submitted at least four fraudulent PPP applications to different lenders between April and June, claiming to need funds for his employees of Sosuda Tech LLC, where he is president and CEO.
The company purportedly provides various technology services to businesses, and prosecutors said Buoi, 38, applied for the funds that are set aside as emergency financial assistance for Americans impacted by the COVID-19 pandemic.
The Coronavirus Aid Relief, and Economic Security — CARES — Act funded the PPP up to $659 billion for forgivable loans to small businesses to help pay their employees.
On a loan application to Bank of America, Buoi asked for $7.5 million and claimed to have 353 employees with an average monthly payroll of $3 million, according to prosecutors.
His application was denied, as were two more he filed — one with lender Fountainhead Commercial Capital for $2 million, claiming he employed 18 people with an average monthly payroll of $150,000, and one with lender Newtek Small Business Finance LLC for another $2 million, claiming to have 96 employees with an average monthly payroll of $800,000, according to an affidavit from an FBI agent who investigated Buoi.
The Massachusetts resident was approved for a $2 million forgivable loan from lender Fundbox Inc., again claiming to have 96 employees with an average monthly payroll of $800,000, according to the government.
While Buoi claimed on the applications that his employees are located in Massachusetts, there's no record that he registered or filed quarterly wage-earning reports as required by the state department of unemployment assistance, the affidavit claims.
Records for the two Bank of America accounts associated with the company show no large expenditures for payroll, according to the government.
According to information prosecutors got from Bank of America, when Buoi was asked for additional payroll documentation, he said 50% of his employees are overseas.
The company's LinkedIn page shows Buoi and six employees located in India, the FBI agent said.
Bank of America froze a total of $1.98 million in Buoi's two accounts as "proceeds traceable to wire fraud" to be forfeited to the federal government, according to prosecutors.
Counsel for Buoi didn't immediately respond to requests for comment Monday.
A representative with the Department of Justice didn't immediately respond to requests for comment Monday.
Buoi is represented by Cara McNamara of the Federal Public Defender Office in the District of Massachusetts.
The government is represented by Assistant U.S. Attorneys Mackenzie Queenin and Carol Head of U.S. Attorney's Office for the District of Massachusetts and Trial Attorney Della Sentilles of the Criminal Division's Fraud Section.
The case is USA v. Elijah Majak Buoi, case number 1:20-mj-04143, U.S. District Court for the District of Massachusetts.
--Editing by Michael Watanabe.
This article has been updated to correct the offices of the attorneys representing the government.
For a reprint of this article, please contact reprints@law360.com.
