Long Islander sentenced in $9.6M COVID-loan fraud scheme

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A Long Island man has been sentenced in federal court in Central Islip Friday for his “mastermind” role in a $9.6 million COVID-loan fraud scheme, officials said.

Rami Saab, also known as Rami Hasan, who was living in Glen Cove, was sentenced to 10 years in prison for leading a “sprawling conspiracy” to fraudulently secure disaster relief loans during the pandemic, according to U.S. Attorney for the Eastern District of New York.

As part of the sentence he is also required to pay restitution of approximately $9.6 million, officials said.

Saab, who had pleaded guilty in July 2023 to conspiracy to commit wire fraud, stemming from his operation of a yearlong scheme to defraud banks and the Small Business Association of millions of dollars’ worth of small business loans under the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDL), officials said.

A second defendant charged in the indictment remains at large, officials said.

“This defendant used fraud and deceit on an extraordinary scale to exploit government programs designed to keep struggling small businesses afloat during an unprecedented public health crisis,” United U.S. Attorney Breon Peace said in a written statement.

The sentence “sends a strong message to all those who saw the public response to the COVID-19 pandemic as little more than a get-rich-quick scheme: this Office will find you and prosecute you to the fullest extent of the law,” he added.

Court filings show that between May 2020 and May 2021, Saab and his co-conspirators fraudulently applied for more than $32 million in PPP and EIDL loans on behalf of shell corporations they controlled.

Relying on false information and fabricated documentation supplied by Saab and his coconspirators, the SBA and private banks administrating the PPP and EIDL programs granted at least 20 such applications, resulting in the disbursement to Saab and his co-conspirators of more than $9.6 million in emergency-relief funds intended for distressed small businesses, officials said.

Through more than 50 otherwise dormant bank accounts, Saab and his co-conspirators first laundered the fraud proceeds to conceal their true nature and source, officials said.  Saab and his associates then used the funds for their own self-enrichment, withdrawing large portions of the loan proceeds in cash, and transferring sums to associates overseas in Turkey and elsewhere.