COVID relief wire fraud scheme uncovered

On Behalf of | Oct 27, 2020 | Fraud

With the COVID-19 back in full swing, many Texans are finding themselves in need of some kind of financial relief. Fortunately, some relief programs exist to help people who are in the direst financial need.

Sometimes, however, programs like these that are intended to help people in need become the targets of fraudulent schemes.

Scheme attempts to defraud several COVID-relief programs

The United States Department of Justice Office of Public Affairs has recently released information about a Seattle man who has pleaded guilty to a count of wire fraud. The 35-year-old man, Baoke Zhang, who owned no businesses at the time, admitted to submitting a fraudulent application to a tech company providing grants to qualifying small businesses.

Zhang also admitted to sending fake letters from “restaurant owners” to two non-profits providing grants to restaurant workers, claiming he and members of his family were restaurant workers who had lost their jobs due to the pandemic. In addition to this, he also submitted fraudulent applications to three different lenders where he claimed to be running several different small businesses, none of which actually exist.

It was not until Zhang had already been paid a $10,000 advance by the SBA that his scheme was detected.

Fraud bites back

Those who try to commit fraud in search of personal gain face strict legal consequences should they get caught. Sometimes, however, a simple mistake in paperwork can lead to an accusation of fraud.

This story shows the lengths that some people will go to to make their fortune through dishonest means. But once that person gets caught, it all comes tumbling down.