Sentencing Memorandum - United States v. Maurice Fayne related docket

Record facts

U.S. District Court for the Northern District of Georgia · No. 1:20-cr-00228-MHC-JKL · Doc. 215-3 · 2021-09-08 · Docket on CourtListener

Summary

A press release from the U.S. Attorney's Office for the Western District of Washington dated August 10, 2021, headed "Issaquah Man Sentenced for Covid-19 Relief Fraud Scheme," filed September 8, 2021 as Doc. 215-3 in No. 1:20-cr-00228-MHC-JKL in the U.S. District Court for the Northern District of Georgia. The office announced that a Washington State man was sentenced to two years in prison after pleading guilty in a case involving nine disaster loan applications seeking over $1.1 million through the EIDL program and the Paycheck Protection Program. According to the release, six applications were approved and more than $700,000 was obtained. It states that he was ordered to pay a $25,000 fine and $709,104.97 in restitution.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

United States Department of Justice

THE UNITED STATES ATTORNEY'S OFFICE

WESTERN DISTRICT. of ° WASHINGTON

U.S. Attorneys » Western District of Washington » News

Department of Justice
U.S. Attorney’s Office

Western District of Washington

FOR IMMEDIATE RELEASE Tuesday, August 10, 2021

Issaquah Man Sentenced for Covid-19 Relief Fraud Scheme

Seattle — A Washington State man was sentenced today to two years in prison for perpetrating a scheme to
fraudulently obtain COVID-19 disaster relief loans guaranteed by the Small Business Administration (SBA)
through the Economic Injury Disaster Loan (EIDL) and the Paycheck Protection Program (PPP) under the
Coronavirus Aid, Relief and Economic Security (CARES) Act.

Austin Hsu, 46, of Issaquah, pleaded guilty on Jan. 21 . According to court documents, Hsu submitted nine
fraudulent disaster loan applications seeking over $1.1 million. Hsu, the owner and CEO of a company
named Blackrock Services P.S. dba Back 2 Health Bellevue (Back 2 Health), received EIDL and PPP funds
for Back 2 Health, and then used the names of Back 2 Health’s current and former employees to apply for
additional PPP loans under the names of four other companies that he owned and controlled. In support of
the fraudulent PPP loan applications, Hsu submitted fake federal tax filings.

Hsu also incorporated a company named Blueline Capital LLC (Blueline) in June 2020 for the purpose of
applying for an EIDL loan in July 2020, and then misrepresented to the SBA that Blueline had been in
business since 2017 and that, as of Jan. 31, 2020, Blueline had nine employees and gross receipts of over
$1.5 million. In truth, Blueline had no business or operations.

Six of Hsu’s nine fraudulent loan applications were approved, and he fraudulently obtained more than
$700,000 in COVID-19 relief funds.

In addition to the prison sentence, Hsu was ordered to pay a fine in the amount of $25,000 and $709,104.97
in restitution.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; Acting U.S.
Attorney Tessa M. Gorman for the Western District of Washington; Inspector General J. Russell George of
the U.S. Treasury Inspector General for Tax Administration (TIGTA); Inspector General Gail S. Ennis of the
Social Security Administration (SSA); Inspector General Hannibal “Mike” Ware of the SBA; and Special
Agent in Charge Cardell Morant of U.S. Immigration and Customs Enforcement’s Homeland Security
Investigation (HSI) made the announcement.

This case was investigated by the TIGTA, SSA — Office of Inspector General (OIG), SBA — OIG, and HSI.

https://www.justice.gov/usao-wdwa/pr/issaquah-man-sentenced-covid-1 9-relief-fraud-scheme 1/2
Trial Attorney Christopher Fenton of the Criminal Division’s Fraud Section and Assistant U.S. Attorney
Steven Masada of the Western District of Washington are prosecuting the case.

The Fraud Section leads the department’s prosecution of fraud schemes that exploit the PPP. In the months
since the PPP began, Fraud Section attorneys have prosecuted more than 100 defendants in more than 70
criminal cases. The Fraud Section has also seized more than $65 million in cash proceeds derived from
fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased
with such proceeds. More information can be found at: https://www.justice.gov/criminal-fraud/ppp-fraud

In May, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the
resources of the Department of Justice in partnership with agencies across government to enhance efforts
to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute
the most culpable domestic and international criminal actors and assists agencies tasked with administering
relief programs to prevent fraud by, among other methods, augmenting and incorporating existing
coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their
schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For
more information on the department’s response to the pandemic, please

visit https:/Awww.justice.gov/coronavirus

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the
Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web
Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form

Topic(s):
Coronavirus
Cyber Crime
Disaster Fraud
Financial Fraud

Component(s):
USAO - Washington, Western

Updated August 10, 2021

https://www.justice.gov/usao-wdwa/pr/issaquah-man-sentenced-covid-1 9-relief-fraud-scheme 2/2

File and source

File

gov.uscourts.gand.278523.215.3.pdf

Size

125,290 bytes

SHA-256

0a79c3114641f52138dbc436679ce8351f2165110913f318b1c69885fe30f630

Our copy

gov.uscourts.gand.278523.215.3.pdf

Original

PACER (login required)