A purported businessman who allegedly falsely claimed to have hundreds of employees in an attempt to secure $20 million in COVID-19 loans was arrested last week, according to the U.S. Attorney’s Office for the Southern District of New York.
Muge Ma, aka “Hummer Mars”, 36, of Manhattan, was charged with bank fraud, wire fraud, making false statements to a bank, and making false statements to the Small Business Administration (SBA), among other charges. The most serious charge carries a sentence of up to 30 years in prison.
According to the criminal complaint, Ma applied for more than $20 million in government-guaranteed loans through the SBA’s Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) Program.
The applications were submitted on behalf of two companies he controlled called New York International Capital LLC (NYIC) and Hurley Human Resources LLC.
Ma represented that the companies had hundreds of employees and paid millions of dollars in wages every month. The companies were purportedly located on the sixth floor of a building on the upper west side of Manhattan. Ma also claimed that he was a U.S. citizen.
The complaint states that Ma is the only employee of either company, the business address is a residential building with no commercial space, and he is a Chinese national with permanent resident status.
Ma submitted fraudulent documents in support of the applications to at least five banks. He submitted fake audited financial statements from a Big Four accounting firm to one bank. One fabricated bank statement that showed a beginning balance of over $10 million actually had a balance of $510.
Ma’s companies received three loans
On April 15, 2020, the SBA gave NYIC a $10,000 advance. Later that month, the SBA approved a $500,000 EIDL loan to NYIC. According to the FBI, Ma spent a portion of the advance at a consumer electronics store and a department store.
The SBA also approved a $150,000 EIDL loan to Hurley.
On May 6, 2020, a New York-based bank approved an $813,250 PPP loan to Hurley. The funds were deposited into the company’s bank account one week later. On May 14, 2020, after Ma learned that his accounts had been frozen, he told the bank that he wanted to return the funds.
Ma is also accused of making false representations to a COVID-19 test kit manufacturer and a medical equipment supplier. On May 18, 2020, he told an FBI agent posing as a sales representative that “NYIC was a registered vendor for New York State . . . and that NYIC had a big team working on a deal for the State”. NYIC is not an authorized vendor of New York State, the complaint states.