Santa Clarita Man Sentenced to More Than 4 Years in Prison for Scheming to Fraudulently Obtain $1.8 Million in COVID-Relief Funds

Summary

A November 15, 2021 press release from the U.S. Attorney's Office for the Central District of California announcing that Hassan Kanyike, 30, of Santa Clarita was sentenced by United States District Judge Virginia A. Phillips to 51 months in federal prison, a $20,000 fine and $1,302,550 in restitution to the SBA and four victim lenders. The release states that Kanyike pleaded guilty to wire fraud and that from April 2020 to June 2020 he submitted six fraudulent PPP and two EIDL applications for his businesses, including the used-car dealer Falcon Motors, which it says had no employees on payroll. It says one application claimed 26 employees and an average monthly payroll of $168,000, and that he had transferred approximately $762,000 to Uganda by the time of his December 2020 arrest.

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LOS ANGELES
– A Santa Clarita Valley man was sentenced today to 51 months in federal prison for scheming to fraudulently obtain approximately $1.8 million in COVID-19 relief guaranteed by the Small Business Administration (SBA) through the Economic Injury Disaster Loan (EIDL) program and the Paycheck Protection Program (PPP).
Hassan Kanyike, 30, of Santa Clarita, was sentenced by United States District Judge Virginia A. Phillips, who also ordered him to pay a $20,000 fine and $1,302,550 in restitution to the SBA and four victim lenders. Kanyike pleaded guilty on March 29 to one count of wire fraud.
From April 2020 to June 2020, Kanyike submitted six fraudulent PPP loan applications and two fraudulent EIDL applications. The applications sought funds to purportedly pay the salaries of employees whom he claimed worked for two of his businesses. Kanyike successfully obtained approximately $1 million through four PPP loans, and another $300,000 through two EIDL loans.
In support of the fraudulent PPP loan applications, Kanyike submitted fake federal tax filings and payroll reports for a used-car business, the Van Nuys-based Falcon Motors. For example, in one loan application, Kanyike falsely claimed the business had 26 employees and an average monthly payroll of $168,000, and he submitted a fabricated IRS tax form claiming Falcon Motors had paid $2,022,300 to employees in 2019.
In reality, Falcon Motors had no employees on payroll. Kanyike further admitted that he obtained additional Employer Identification Numbers from the IRS in April and May 2020 so he could apply for multiple loans for the same used-car business. Kanyike then used a substantial portion of the PPP loan proceeds for his own personal benefit.
Kanyike schemed to fraudulently obtain eight loans totaling approximately $1.8 million, of which six loans worth a total of $1,302,550 were approved.
At the time of his arrest in December 2020, Kanyike had transferred approximately $762,000 to Uganda, his country of citizenship, from one of the business accounts that had received the loan proceeds, in violation of the terms of the PPP and EIDL program.
Homeland Security Investigations and the Treasury Inspector General for Tax Administration investigated the case.
Assistant United States Attorney Richard E. Robinson of the Major Frauds Section and Assistant Chief William Johnston of the Criminal Division’s Fraud Section at the Department of Justice prosecuted this case.
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
.

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