A 38-year-old Massachusetts man was arrested Monday and charged with filing fraudulent loan applications through the Paycheck Protection Program.
Elijah Majak Buoi, of Winchester, was charged in a federal criminal complaint with wire fraud, according to the U.S. Attorney’s Office.
Buoi, according to authorities, is accused of filing fraudulent loan applications seeking more than $13 million in forgivable loans guaranteed by the Small Business Administration for COVID-19 relief through the Paycheck Protection Program under the Coronavirus Aid, Relief and Economic Security (CARES) Act.
According to the complaint, Buoi is the president and CEO of an information technology services company, Sosuda Tech, LLC.
“Between April 2020 and June 2020, Buoi allegedly submitted fraudulent applications for over $13 million in PPP loans through SBA-approved lenders,” authorities said. “In these applications, Buoi misrepresented the number of employees and payroll expenses and falsely certified that the United States was the primary residence for his employees.”
He is also accused of submitted falsified documentation in support of his applications for PPP funds. Federal authorities said Buoi ultimately received over $2 million in PPP funds.
The government has seized approximately $1.98 million from Sosuda’s business bank accounts.
“The defendant tried to defraud an emergency program designed to help businesses, and their employees, survive the most difficult economic crisis since the Great Depression,” said United States Attorney Andrew E. Lelling. “This behavior is reprehensible, and my office is committed to rooting out and prosecuting this kind of fraud wherever we find it.”
The CARES Act, a federal law, was enacted on March 29 and designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic.
The CARES Act authorized up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April, Congress authorized over $300 billion in additional PPP funding.
The PPP allows small businesses and other organizations that quality the ability to receive loans with a maturity of two years and an interest rate of 1 percent.
The loans have to be used for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal on the PPP loan to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.
“It’s outrageous anyone would try to steal from a program that was set up to be a lifeline to businesses struggling to stay afloat during the pandemic, but we believe that’s exactly what Elijah Buoi did. He allegedly tried to steal $13.5 million for his own use by lying on at least four different loan applications,” said Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “This case should serve as a warning to others plotting similar scams—we are acting and investigating in real-time to stop anyone using this crisis as a means to rip off the federal government at the expense of hard-working taxpayers.”
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