Indian-origin business Owners arrested for $53 Million COVID-19 relief fraud scheme in Texas

A group of approximately 14 individuals, including several Indian-origin business owners and employees, has been charged in a major fraud scheme involving a COVID-19 relief program in Texas.

The case, considered the largest investigated by the Pandemic Response Accountability Committee Fraud Task Force, resulted in arrests across Texas, California, and Oklahoma.

The defendants are accused of defrauding the Paycheck Protection Program (PPP) and various financial institutions, siphoning over $53 million in loan proceeds. The PPP, introduced during the COVID-19 pandemic, aimed to provide financial assistance to affected individuals and businesses.

The accused face charges including conspiracy to commit bank fraud, bank fraud, wire fraud, making false statements, and conspiracy to commit money laundering.

According to the indictment, the defendants allegedly submitted fraudulent PPP loan applications by inflating payroll expenses through manipulation of bank statements and tax forms. They also created a false paper trail of payroll expenses by routing the loan funds through multiple bank accounts.

Among those charged are Mihir Patel, CFO of Sunshine Recycling, along with owners and employees of various businesses such as Mammoth Group, R.A. Industries, L.K. Industries, West Texas Scrap, Gulf Coast Scrap, 4G Metals, West Texas Equipment, NTC Industries, Sunshine Recycling, Level Eight, Elephant Recycling, Nanosoft Technologies, and others.

Leigha Simonton, US Attorney for the Northern District of Texas, emphasized the gravity of the charges, highlighting the impact on legitimate businesses struggling to sustain their operations during the pandemic. If convicted, the defendants could face substantial penalties, including lengthy prison terms.