Businessman Charged with Bank Fraud for Multi-Million-Dollar Payroll Protection Program Fraudulent Scheme

Businessman Charged with Bank Fraud for Multi-Million-Dollar Payroll Protection Program Fraudulent Scheme

By: Daniel Perlman | October 22, 2020 | PPP Fraud

An East Bay businessman faces charges from a filed federal criminal complaint for the alleged multi-million-dollar scam designed to illegally obtain over 22 million dollars in loans from the United States government’s Payroll Protection Program (PPP). The businessman was charged with bank fraud following investigations revealing multiple applications of the same man under different names.

Attila Colar, 48, has been charged with bank fraud, in violation of 18 USC § 1344, after engaging in a fraudulent scheme targeting the US government’s Payroll Protection Program. The criminal complaint filed against the defendant alleges that he has submitted three applications on behalf of All Hands on Deck, Inc. – a Hercules-based, non-profit organization that claims to be providing housing to individuals who have just gotten out of prison. All Hands on Deck, Inc. further claims that they offer several services, including food bank services, life and work skills training such as prenatal life skills training, and resiliency treatment services, among other assistance available to guide individuals to accustom themselves to the current societal undertakings.

Investigations further revealed that the defendant has not only filed loan applications for All Hands on Deck, Inc., but has also filed for two other companies – The Family Investment Group, and Oversight Security, Inc., under different names. The defendant allegedly used different aliases, including Dahood Sharieff Bey, Sharieff Dahood Bey, Dawud Sharieff Bey Ahed, Dawud Azadene, and Attilla Collan. With all applications for the three companies filed between April and June of 2020, the defendant was looking to defraud the PPP out of $23 million.

In April of 2020, the defendant filed for a loan application submitted to a local bank through the US government’s Payroll Protection Program, under the company All Hands on Deck, Inc., amounting to $2,422,615.00 loan request. In the next two months, the defendant has again submitted two different applications for loans in banks, both under All Hands on Deck, Inc., requesting for $1,618,200.00 and $ 2,000,000.00, respectively. Apart from his applications under All Hands on Deck, Inc., it was noted that the defendant had filed two applications for The Family Investment Group, and four applications for the Oversight Security, Inc., all in June. These applications were made under different aliases, and amounted to a total of $17,195,750.63 loan request. In total, the defendant has submitted nine applications from April to June of 2020, amounting to $23,236,565.63. It was said that out of the nine loan applications that the defendant has submitted in total, he successfully received $1,113,112.00 million funding through a loan application from a bank in Salt Lake City, Utah.

The lawsuit filed against the defendant alleges that all loan applications to different banks made by the defendant through the US government’s PPP were fraudulent, and contained false information, glaring omissions, and misleading statements. It was reported that the defendant included false details on the names of employees in his records and submitted falsified payroll reports, and fake tax documents. In one particular application, he claimed that All Hands on Deck, Inc., employed 45 people in the third quarter of 2019, and 81 people in both the fourth quarter of 2019 and the first quarter of 2020; however, included in the list of the reported employees were the defendant’s aliases, and several contractors and residents of All Hands on Deck, who were proven to have not been employed by the company thus, making the information written on the IRS Forms 941 submitted by the defendant inaccurate and fallacious. In addition to the false records and counterfeit documents submitted by the defendant, he has also denied having criminal records.

The multi-million-dollar fraud lawsuit was announced by the United States Attorney David L. Anderson, along with FBI Special Agent in Charge John L. Bennett, Federal Reserve System Office of Inspector General for the Board of Governors and the Bureau of Consumer Financial Protection (FRB/CFPB-OIG) Western Region Special Agent in Charge Scott Redington, and Small Business Administration Office of the Inspector General (SBA-OIG) Western Region Special Agent in Charge Weston King.

US Attorney Anderson noted that the United States government’s Payroll Protection Program was meant to support Americans during this pandemic, especially with economic distress. With the fraudulent scheme designed to swindle the program out of over $22 million, United States Attorney David L. Anderson said that the defendant truly set a methodical approach to defraud the program out of millions of dollars that is immensely needed by the public to endure the national crisis.

FBI Special Agent in Charge John F. Bennett asserted that the FBI is quickly and carefully investigating the claims of the lawsuit made in line with the Payroll Protection Program fraud to secure the American citizens from criminals who are taking advantage of the current situation for their own greed, and ensure that no other individual is further victimized, especially with the economic suffering that the COVID-19 has brought upon everyone.

FRB/CFPB-OIG Western Region Special Agent in Charge Scott Redington also declared that restitutions would be brought upon the criminals targeting financial institutions. “We are fully committed to bringing to justice wrongdoers who exploit and defraud financial institutions and the government’s response to the COVID-19 pandemic,” said Special Agent in Charge Redington.

The Payroll Protection Program is being administered by the United States Small Business Administration as a part of the $2.2 trillion Coronavirus Aid Relief and Economic Security (CARES) Act – a federal law that was enacted in March of 2020 as a response to the COVID-19 pandemic, to provide emergency financial assistance to American citizens who are suffering from the economic distress that the pandemic has brought to the nation. The program offers loans to businesses, in which it is specified that proceeds from the PPP shall be used only on certain permissible expenses, including interests on mortgages, payroll costs, rent, and utilities. Additionally, the Payroll Protection Program has declared that interests and principal on the PPP loan shall be entirely forgiven, if and only if, the business is able to utilize 60% of the loan proceeds on payroll expenses and spend the loan on the aforementioned permissible expenses within a designated period of time. All loans made through the Paycheck Protection Program are fully guaranteed by the U.S. Small Business Administration.

In April of 2020, the Congress has authorized additional PPP funding amounting to over $300 billion. The Paycheck Protection Program currently allows qualifying small business and other eligible organizations to receive loans with a maturity of two years, and an interest rate of only one percent.

Small Business Administration Office of the Inspector General (SBA-OIG) Western Region Special Agent in Charge Weston King thanked the United States Attorney’s Office and their several law enforcement agency partners for their collaborative efforts and their dedication to the pursuit of justice in the case. “Fraudsters are tireless and brazen in their fraudulent efforts to steal from taxpayers for their selfish ends. OIG and its law enforcement partners will relentlessly pursue fraudsters and bring them to justice,” said Special Agent in Charge King.

Attila Colar made his initial federal court appearance on October 2, 2020, before the United States Magistrate Judge Kandis A. Westmore, who has ordered the defendant released on a $100,000 cash bond. The defendant faces bank fraud charges, which may have a maximum penalty of 30 years imprisonment, along with million-dollar restitution, if proven guilty as charged. Furthermore, the defendant is set for another federal court appearance on October 27, 2020.

The United States Attorney’s Office for the Northern District of California – Special Prosecutions Bureau is currently handling the prosecution of the multi-million-dollar fraud case, as a result of the investigation led by the FBI, the FRB/CFPB-OIG, and the SBA-OIG.

With the provided criminal documents containing allegations that are not evidence of guilt, the public is reminded that the defendant shall be presumed innocent and is entitled to a fair trial at which the state has the burden of proving guilt beyond a reasonable doubt.

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