Winchester Man Charged with COVID-Relief Fraud
BOSTON – A Winchester man was arrested today and charged with allegedly filing fraudulent loan applications seeking more than $13 million in forgivable loans guaranteed by the Small Business Administration (SBA) for COVID-19 relief through the Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief and Economic Security (CARES) Act.
Elijah Majak Buoi, 38, was charged in a criminal complaint with wire fraud, and will appear in federal court in Boston this afternoon.
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. 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. Buoi also allegedly submitted falsified documentation in support of his applications for PPP funds. The complaint further alleges that 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.”
“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.”
“The actions of this defendant are criminally reprehensible,” said Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation. “Defrauding a government program designed to provide financial assistance to small business owners during the Coronavirus pandemic is tantamount to taking money directly out of the pockets of those who need it most.”
“We are fully committed to holding accountable any wrongdoers whose fraudulent actions impact the Federal Reserve Board’s ability to assist small businesses under the Paycheck Protection Program Liquidity Facility,” said Inspector General Mark Bialek of the Board of Governors of the Federal Reserve System and the Consumer Protection Bureau, Office of Inspector General.
“We are proud to work with our law enforcement partners to investigate and prosecute the defendant for his egregious conduct,” said Inspector General Jay N. Lerner of the Federal Deposit Insurance Corporation, Officer of Inspector General. “We will continue to work hard to ensure these individuals are held accountable for using the COVID-19 pandemic as an opportunity to defraud the nation’s financial institutions and government relief programs.”
The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.
The PPP allows qualifying small-businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. PPP loan proceeds must be used by businesses on 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.
U.S. Attorney Lelling; Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division; FBI Boston SAC Bonavolonta; IRS-CI SAC O’Connell; FRB-CFPB OIG Inspector General Bialek; and FDIC OIG Inspector General Lerner made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Mackenzie Queenin and Carol Head of Lelling’s Office and Trial Attorney Della Sentilles of the Criminal Division’s Fraud Section. The Justice Department acknowledges and thanks the SBA OIG for their support and assistance.
Massachusetts residents with information about attempted fraud involving COVID-19 should contact (add our hotline/email). Information about allegations of attempted fraud involving COVID-19 can also report it by calling the Department of Justice’s National Center for Disaster Fraud (BCDF) hotline by phone (1-866-720-5721) or via an online reporting form available at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
The details contained in the criminal complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.