A federal jury in Detroit convicted a Michigan man last Thursday for a wire fraud and money laundering scheme to obtain more than $4.1 million in Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
According to court documents and evidence presented at trial, Johnny Ho, 41, of Novi, engaged in a conspiracy to submit falsified PPP and EIDL loan applications in order to obtain COVID-19 relief funds that he was not entitled to receive. The evidence showed that Ho, who owned Diva Nails & Spa III LLC, located in Northville, submitted inflated payroll information, and otherwise falsified loan application information. Ho personally submitted two fraudulent PPP and EIDL loan applications seeking nearly $350,000 in funds that were intended to help small businesses and their employees impacted by the COVID-19 pandemic. In total, Ho and his co-conspirators submitted 29 different fraudulent PPP and EIDL loan applications on behalf of 16 businesses totaling over $4.1 million.
Ho was convicted of one count of conspiracy to commit wire fraud, two counts of wire fraud, and two counts of money laundering. He is scheduled to be sentenced on September 27 and faces up to 20 years in prison for each of the wire fraud counts, and up to 10 years in prison on the money laundering counts. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; U.S. Attorney Dawn Ison for the Eastern District of Michigan; Special Agent in Charge James A. Tarasca of the FBI’s Detroit Field Office; and Special Agent in Charge Sharon Johnson of the SBA-Office of Inspector General (SBA-OIG) made the announcement.
The case was investigated by the FBI and the SBA-OIG.
Trial Attorney Patrick J. Suter of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Ryan A. Particka for the Eastern District of Michigan are prosecuting the case.
On May 17, 2021, the attorney general established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 1-866-720-5721 or via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
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