A North Jersey businessman fraudulently secured almost $2 million in federal COVID-19 pandemic loans he wasn’t entitled to, then diverted the cash into accounts held by members of the family, together with his younger youngsters, federal authorities charged.
Rocco A. Malanga, 48, of Hackettstown, “used a wide range of false statements to fraudulently acquire roughly $1.eight million in federal COVID-19 emergency aid funds meant for distressed small companies,” U.S. Lawyer Craig Carpenito mentioned Thursday.
He then diverted the Paycheck Safety Program (PPP) cash to “accounts under the control of his relatives, including his minor children, and to another company that did not obtain a PPP loan,” Carpenito mentioned.
Malanga is amongst almost 60 individuals charged by the U.S. Justice Division since May with making an attempt to steal greater than $175 million from the taxpayer-funded PPP, which was designed to maintain struggling small companies afloat in the course of the pandemic.
A number of hundred extra investigations — involving almost 500 suspects and tons of of tens of millions in loans – have been persevering with, federal authorities mentioned.,
Congress in late March established the $670 billion rescue fund by the CARES Act, which was “designed to supply emergency monetary help to tens of millions of Individuals who’re struggling the financial results ensuing from the COVID-19 pandemic,” Carpenito mentioned.
This system distributed an estimated $525 billion in forgivable loans to greater than 5 million firms, saving an estimated 50 million jobs throughout one of many worst nationwide crises in current historical past.
Tens of hundreds of these recipients, it seems, weren’t eligible, federal authorities mentioned.
Malanga in a single occasion, for example, “submitted a PPP loan application on behalf of one of his companies that had supporting documentation that claimed that the company had 47 employees, a monthly payroll of $324,081, and paid employees approximately $3.9 million in total compensation for 2019,” Carpenito mentioned.
Nevertheless, he mentioned, IRS data confirmed that the corporate paid no salaries or wages final yr.
A federal decide in Newark launched Malanga on a $750,000 unsecured bond following a video-conferenced preliminary look Thursday on wire fraud, bank fraud and cash laundering prices.
Carpenito and Performing Assistant Lawyer General Rabbitt credited inspectors of the U.S. Postal Inspection Service and particular brokers of IRS – Prison Investigation with the investigation resulting in Malanga’s arrest.
Additionally they thanked the inspector common’s workplaces on the Federal Reserve Bank, the Federal Deposit Insurance coverage Company and the Social Safety Administration.
Dealing with the case for the federal government are Assistant U.S. Lawyer Blake Coppotelli of the District of New Jersey and Trial Lawyer Della Sentilles of the Fraud Part of the U.S. Division of Justice.
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