A New Low in Used Car Deals

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There are undoubtedly many honest used car dealers. Then there’s the California dealer who used several Employer Identification Numbers for the same used car business to apply for multiple Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDLs). (Wonder how many times he sold the same car to different customers?)

The two government programs are intended to help small businesses impacted by the COVID-19 pandemic receive funding to pay employees on their payroll and cover other legitimate business expenses. (Not to line the pockets of schemers who want money for nothing.)

Hussan Kanyike collected about $1 million from four fraudulent PPP loans, and over $300,000 from two fraudulent EIDLs. (He actually submitted six fraudulent PPP applications–but hey, you win some, you lose some.)

Kanyike submitted fake federal tax filings and payroll reports. In one loan application, he claimed his business had 26 employees and an average monthly payroll of $168,000. He also submitted a fabricated IRS tax form claiming he paid over $2 million in payroll during 2019. During his plea, he fessed up to having fewer employees and a much lower payroll. (He was only honest when he had to be.)

Authorities caught up with the fraudster at Los Angeles International Airport, as he was about to fly to Dubai. When arrested, Kanyike had already transferred $762,000 of the fraudulent loan funding to a bank in Uganda, his country of citizenship. (The least he could do was buy American with his ill-gotten cash.)

Kanyike pleaded guilty to one count of wire fraud in March 2021 in connection with his COVID loan fraud. He admitted during that he used a substantial portion of the PPP loans for his personal benefit. (But, of course!) His sentencing is scheduled for August 23, when he faces a maximum of 20 years in prison. He must also pay about $1.3 million in restitution. (Sounds like he needs to sell a LOT of used cars before he heads to prison.)

Today’s Fraud of the Day comes from a press release from the United States Attorney’s Office for the Central District of California, Santa Clarita Man Pleads Guilty to COVID-19 Relief Fraud,” dated March 29, 2021.

LOS ANGELES – A Santa Clarita Valley man pleaded guilty today to perpetrating a scheme to fraudulently obtain approximately $1.8 million in COVID-19 relief guaranteed by the Small Business Administration (SBA) through the Economic Injury Disaster Loan (EIDL) program and the Paycheck Protection Program (PPP).

According to court documents, Hassan Kanyike, 29, of Santa Clarita, admitted that he submitted six fraudulent PPP loan applications and two fraudulent EIDL applications. The applications sought funds to purportedly pay the salaries of employees whom he claimed worked for two of his businesses. Kanyike successfully obtained approximately $1 million through four PPP loans, and another $300,000 through two EIDL loans.

 

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.