Engineer charged with over $10m Covid-19 relief fraud

AN Asian-origin engineer in the US has been charged with fraudulently seeking more than $10 million in loans under a coronavirus relief programme set up to help small businesses.

Shashank Rai, 30, allegedly sought millions of dollars in forgivable loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act from two different banks by claiming to have 250 employees earning wages when, in fact, no employee worked for his alleged business.

Rai, who lives in Texas, is charged with violations of wire fraud, bank fraud, false statements to a financial institution, and false statements to the SBA.

‘As alleged, Rai fraudulently pursued millions of dollars in loans intended for legitimate small businesses suffering the economic hardships of the Covid-19 pandemic,’ Assistant Attorney General Brian Benczkowski of the Justice Department’s Criminal Division said.

US Attorney Joseph Brown of the Eastern District of Texas described Rai’s behaviour as ‘very brazen’, saying those who submit these applications for loans or other assistance need to understand that there are people checking on the representations made, and those representations are made under oath and subject to the penalties of perjury.

‘Federal agencies are watching for fraud, and people who lie and try to cheat the system are going to be caught and prosecuted,’ he said.

Inspector General Jay Lerner of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC OIG) said the charges hold Rai responsible for his actions to ‘swindle money out of a federal program intended to help those in need during a pandemic crisis’.

‘When an individual cheats the Paycheck Protection Program out of money, it deprives hard-working Americans and deserving small businesses,’ Lerner said.