A California man has been sentenced to 12 months and one day in prison after being found guilty of defrauding the federal government's COVID-19 relief efforts. Nipun Desai, 56, was charged with making false statements to secure a Small Business Administration-backed Paycheck Protection Program (PPP) loan for a hotel he owned in Metairie, Louisiana. According to a press release from the U.S. Attorney's Office for the Eastern District of Louisiana, Desai's hotel was not operational and lacked a payroll at the time of his loan application. The CARES Act was designed to help businesses keep their workforce employed during the Coronavirus (COVID-19) pandemic.
Evidence presented in court showed that on January 25, 2021, Desai falsely claimed to have an active business with employees to obtain a loan of $146,947.50. However, the hotel in question was permanently closed, and the act to fraudulently misrepresent the business's status enabled him to illegally access funds meant for struggling businesses in the throes of the pandemic. In addition to the prison term, the judge ordered Desai to split his incarceration between the Bureau of Prisons and home confinement. He faces a subsequent two years of supervised release after serving his sentence.
Furthermore, Desai has been ordered to repay approximately $234,000 to the SBA and $26,000 to the Louisiana Workforce Commission. The court also imposed a mandatory special assessment fee of $100 and a steep $25,000 fine. In statements acquired by the U.S. Attorney's Office, the investigation was part of the efforts by the Pandemic Response Accountability Committee (PRAC) Task Force to ensure oversight and prevent mismanagement of federal funds designated for COVID-19 relief.
The PRAC Task Force, backed by the Pandemic Analytics Center of Excellence, uses advanced analytic and forensic technologies to pursue data-driven investigations into pandemic relief fraud. This case was also bolstered by the collaborative efforts of the U.S. Department of Veterans Affairs - Office of Inspector General, the Department of Labor – Office of Inspector General, and the U.S. Bankruptcy Trustee’s Office (Region 5). Assistant U.S. Attorney Edward J. Rivera of the Financial Crimes Unit handled the prosecution, earning praise from Acting U.S. Attorney Michael M. Simpson for bringing Desai to justice.
For those who wish to report suspected fraud involving COVID-19 relief efforts, the Department of Justice encourages contacting the National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or submitting the information through the NCDF Web Complaint Form.
