A Bergen County-based attorney was arrested Thursday after he was accused of fraudulently getting $9 million in loans meant to help small businesses during the COVID-19 pandemic and used them to buy a million-dollar home and make other purchases, federal prosecutors said.
Choi allegedly submitted three fake Paycheck Protection Program (PPP) loans to three different lenders on behalf of three different businesses he said he owned that provide educational services, Carpenito said. He also lied about the existence of hundreds of employees that worked there, manipulated bank and tax records and falsified a driver’s license on the applications, the office said.
The PPP loans were part of the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act which went into law on March 29 that was designed to provide emergency financial relief to millions of Americans who were suffering the economic effects of the coronavirus pandemic.
Part of the act included the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. Small businesses in New Jersey were approved for more than $9.5 billion in loans from the program as of April 16.
Choi told the lenders that he paid the employees of these companies over $3 million in monthly wages and the three lenders eventually paid him $3 million for each loan, federal prosecutors said.
He then used the loans to pay for personal expenses including a $1 million home in Cresskill, $30,000 in remodeling and other improvements and invested millions more in the stock market though an account held in the name of his spouse, Carpenito said.