Somerset County man admits $850K Paycheck Protection Program fraud scheme
NORTH PLAINFIELD BOROUGH, NJ (Somerset County) – A Somerset County man admitted fraudulently obtaining over $850,000 in federal Paycheck Protection Program (PPP) loans, according to U.S. Attorney Philip R. Sellinger.
Butherde Darius, 50, of North Plainfield Borough pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court on Nov. 21 to one count of conspiracy to commit bank fraud, and one count of money laundering, Sellinger said.
According to documents filed in this case and statements made in court, Darius conspired with at least one individual to submit a fraudulent PPP loan application to a lender on behalf of a purported business that he controlled, obtaining over $850,000. He engaged in various financial transactions with the fraudulently obtained loan proceeds. The application Darius and his conspirator submitted contained fraudulent representations to the lender – a Federal Home Loan Bank member – and the SBA, including bogus federal tax documents purportedly from the IRS.
Darius also fabricated the existence of employees and wages paid through the purported businesses. According to IRS records, however, none of the purported tax documents that were submitted in support of the loan applications were ever filed with the IRS. Darius loan application for his purported business was approved for approximately $852,000 in federal COVID-19 emergency relief funds meant for distressed small businesses. Darius then used a portion of the proceeds for various personal expenses, according to to documents filed in this case and statements made in court.
The count of conspiracy to commit bank fraud carries a maximum penalty of 30 years in prison and a $1 million fine. The count of money laundering carries a maximum penalty of 10 years in prison and a maximum fine of $250,000.
Sentencing is scheduled for March 6, 2023.