Chinese man sentenced to 4 years in prison for pandemic fraud

A Chinese man was sentenced to more than four years in prison Thursday after admitting that he fraudulently tried to get $20m in federal coronavirus-relief funds meant to rescue distressed businesses.

United States District Judge Richard M Berman announced the four-year, four-month prison term for Muge Ma at a sentencing hearing in Manhattan.

The judge said the prison term was necessary because of the seriousness of the crimes and the need for others to be warned against abusing government programmes meant to help people in a national emergency.

Ma, 38, was arrested in May 2020 by federal authorities who said he had applied to at least five banks to try to get more than $20m in government-guaranteed loans from the Paycheck Protection Program and the Economic Injury Disaster Loan programme. Both programmes were designed for businesses harmed by coronavirus shutdowns.

Authorities said he falsely claimed to be paying hundreds of employees millions of dollars in wages through two companies he controlled. To support the claims, he submitted fraudulent bank, tax, insurance and payroll records and provided banks with links to websites that described the companies as “global,” prosecutors said.

In fact, they said, Ma at the time was working alone out of his $1.5m Manhattan condominium, falsely claiming that one of his companies was representing New York state and was helping then-Governor Andrew Cuomo to procure COVID-19 test kits and personal protective equipment for front-line workers.

Ma, a lawful permanent resident jailed since his May 2020 arrest, repeatedly said he was sorry before the sentence was imposed. He came to the US in 2011 on a student visa.

“I love America,” Ma said. “I’m very, very sorry to my country, America.”

Besides decrying jail conditions during the last two years as “dirty, harsh, extremely cruel,” he repeatedly apologised for his crimes and said, “I detest myself so much.”

The self-criticism reached such a point that Berman interrupted Ma, telling him: “Mr Ma, I don’t have any doubt about how sorry you are.”

“I’m not seeking blood from you,” the judge said before he urged Ma to stop dwelling on his crimes and focus on how he can be successful in the future.

Prosecutors said Ma’s fraud convinced one bank to approve and disburse more than $800,000 in loan funds for one of Ma’s companies, although the money was frozen during the investigation. They said another $650,000 in loans had been approved and a $10,000 loan advance had been provided.

In a release Thursday, US Attorney Damian Williams said Ma carried out his crimes within days of Congress authorising billions of dollars to help small businesses harmed by the pandemic.

“Muge Ma saw it as an opportunity to enrich himself by applying for millions of dollars in funds to pay wages to hundreds of employees that never existed,” Williams said.