In a recent crackdown on fraudulent financial conduct in Queens, District Attorney Melinda Katz, together with New York State Inspector General Lucy Lang, have announced charges against nine individuals in a significant scheme to game disaster relief programs provided in the wake of COVID-19’s economic disruption. As per details published by the Queens District Attorney's Office, these defendants are accused of obtaining over $2.2 million through fraudulent claims of economic hardship made on behalf of nonexistent or inactive businesses.
All nine defendants face charges including grand larceny and falsifying business records. Each is individually accused of fraudulently obtaining thousands of dollars from relief programs such as the New York State Empire State Development Pandemic Small Business Recovery Grant Program and the federal Economic Injury Disaster Loan program. These programs were intended to support legitimate small businesses but were allegedly misused for personal gain.
District Attorney Katz emphasized in a statement the toll these actions take on real victims, "The COVID-19 pandemic caused great hardship for small business owners and their employees. These defendants are accused of intentionally exploiting the state and federal disaster relief programs through a multitude of fraudulent companies and lining their pockets with the proceeds. My office will not allow individuals to defraud our public service programs and I thank our partners at the New York State Inspector General’s office and the NYPD for their work. We will seek restitution as part of our efforts to bring these defendants to justice," according to the Queens District Attorney's Office.
The investigation uncovered that loan funds meant for critical business costs were transferred into the personal bank accounts of these defendants shortly after receiving them, linked to a larger network of transactions, including transfers to third parties and credit card payments. Highlighting the depth of the alleged fraud, one defendant, Tufail Ahmed, applied for sizable loans on behalf of 127 Rivington Corp and Dresden Associates, Inc., receiving nearly $1 million deposited across related business accounts, which authorities claim were then misused to cover expenses far from their originally stated purposes.
This case highlights what authorities describe as a significant breach of trust, noting that the bank records under review showed no clear business activity or revenue to support the loans and grants obtained. The investigation required a coordinated effort between the Queens District Attorney’s Office and the New York State Office of the Inspector General, with contributions from Investigative Counsel Ray Gdula and Senior Investigator Ilene Gates to examine the alleged fraud.
The severity of this breach of public trust is reflected in the potential for the defendants to face up to 25 years in prison if convicted of the top charge. The prosecution is being led by Assistant District Attorney Talia Vogel, under the oversight of Executive Assistant District Attorney for Investigations Gerard A. Brave.
